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Giant enterprises stock has a required return of 1 2 . 6 % . The company which plans to pay a dividend of $ 2

Giant enterprises stock has a required return of 12.6%. The company which plans to pay a dividend of $2.61 per share in the coming year, anticipate that its future dividends will increase at an annual rate consistent with that experienced over the 2016-2022 period, when the following dividends were paid. 2022=2.442021=2.282020=2.132019=1.992018=1.862017=1.742016=1.631.34 A) If the risk-free rate is 4%, what is the risk premium on Giant's stock? B) Using the constant-growth model, estimate the value of Giant's stock. C) Expain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock.

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