Integrative-Risk and Valuation. Hamlin Steel Company wishes to determine the value of Craf Foundry, a firm that it is considering acquiring for cash. Harnlin wishes to determine the applicable discount rate to use as an inpet to the constant-growth valuation model. Craft's stock is not publicly traded. After studying the required returns of fimm similar to Cratt that are publicly traded, Hamlin betieves that an appropriate risk premium on Craft stock is about 9%. The risk-froe rate is curtently 4%. Craft's dividend per share for each of the past 6 yoars is shown in the following table: a. Given that Craft is expected to pay a dividend of \$3.24 next year, determine the maximum cash price that Hamlin should pay for each share of Craft. (Hint Round the growth rate to the nearest whole percent.) b. Describe the effect on the resulting value of Craft from: (1) A decrease in its dividend growth rate of 2% from that exhibited over the 2014-2019 period. (2) A decrease in its risk premium to 8%. Data table (Click on the icon here 0, in order to copy the contents of the data table below into a spreadsheet.) arest whole percentage.) 1. (Round to the nearest cent) and the company-specifo For Craft, the lowering of the sase in the risk premium reflected in risk leading to a. The required return on Cratts slock is \%. (Round to the nearest whole percentage.) The maximum cash price that Hamin should pay for each shafe of Crat is $ (Round to the nearest cent.) b. (1) I1 the dividend growth rate decreases by 2\%, the maximum cash price that Hamlin should pay for each share of Crat is $ (Round to the nearest cent.) (2) It the risk premium decreases to B%, the required retum on Crafs slock is %. (Round to the nearest whole percentage) With a 125 required retum, the maximum cash price that Hamlin should pay for each share of Crat is (Round to the neorest cent) Price is a function of the current dividend, , and the risk.tieen rate, and the company-spectic tuture caph flows resuling in in share price. The decrease in the risk premium reflected dividend growth rate in thare price. (Select the best answers from the dop-down menus)