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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 The company which plans to pay a dividend of $ per share in the coming year, anticipate that its future dividends will increase at an annual rate consistent with that experienced over the period, when the following dividends were paid. A If the riskfree rate is what is the risk premium on Giant's stock? B Using the constantgrowth 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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