hw 7 finc 331 question 8 please answer all parts a &b

Integrative- Risk and Valuation. Hamin Steel Compary wishes to determino the value of Craft Foundry, a frm that is is considering acquiring for cash. Hamin withes so detemina the acplicabie dscount rate to use as an irput to tho constart-growth valuation model. Craft's shock is not publicly traded. After studying the required returns of firms timilar to Craft that are publicy traded, Hurith belioves that an appropriate risk premium on Craft stock is about 8%. The risk.tree rate is curcently 4%. Craffs dividend per ahare for each of the past 6 years as shown in the following acie. Fin . a. Given that Cratt is expected to pay a dividend of $2.74 next yoar, determine the maximum cash peice that Hamlin should pay foc each shace of Cratt. (Hint: Rlound the groveth rate to ithe nearent wholie percent.) b. Describe the effect on the resilting value of Cratt fromc (1) A decrease in its dividend growh rase of 2% from that exhibited over the 2014-2019 period. (2) A decrease in its risk premium to 7%. a. The requited retum on Cratrs stock is Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.)