Integrative$-$Risk and valuation Giant Enterprises' stock has a required return of $14\mathrm{.}5\%.$ The company, which plans to pay a dividend of $$1\mathrm{.}98$ per share in the coming year,

anticipates that its future dividends will increase at an annual rate consistent with that experienced over $2013-2019$ period, when the following dividends were paid:

a$.$ If the risk$-$free rate is $6\%,$ 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 $6\%,$ 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.

Data table

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into a spreadsheet.$)$