Integrative$-$Risk and valuation Giant Enterprises' stock has a required return of $14\mathrm{.}4\%.$ The company, which plans to pay a dividend of $$1\mathrm{.}61$ per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over $2016-2022$ period, when the following dividends were paid:

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. $($Hint: Round the computed dividend growth rate to the nearest whole percent.$)$

c$.$ Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock.

a$.$ If the risk$-$free rate is $4\%,$ the risk premium on Giant's stock is $\_\_.($Round to one decimal place.$)$

b$.$ Using the constant$-$growth model, the value of Giant's stock is $$.($Round to the nearest cent.$)$

c$.$ Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. $($Select from the drop$-$down menus.$)$

A decrease in the risk premium would the required rate of return, which in turn would the price of the stock.