Integrative - Risk and valuation Giant Enterprises' stock has a required return of 12.4%. The company, which plans to pay a dividend of $1.56 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 3%, 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. \begin{tabular}{cc} \hline Year & Dividend per Share \\ \hline 2022 & $1.46 \\ 2021 & $1.36 \\ 2020 & $1.27 \\ 2019 & $1.19 \\ 2018 & $1.11 \\ 2017 & $1.04 \\ 2016 & $0.97 \\ \hline \end{tabular}