omework: Chapter 7. Stock aluation Question 16, P7-24 (book/static) Part 1 of 6 > HW Score: 60.42%, 9.67 of 16 points O Points: 0 of 1 Save Data table tive-Risk and Valuation Ham! ble discount rate to use as an inpu traded Hamlin believes that an a in the following table: 23 for cash. Hamlin wishes to determine the of firms similar to Craft that are Cancel e for each of the past 6 years is (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Craft. (Hint: Round the growth rate to the Year en that Craft is expected to pay a d Et whole percent.) scribe the effect on the resulting va :) A decrease in its dividend growth 2) A decrease in its risk premium to Dividend per Share $3.44 $3.21 $3.00 2019 2018 2017 2016 2015 2014 $2.81 $2.62 $2.45 he required return on Craft's stock is Print Done Clear all View an example Check answer Get more help - Etext pages O e . $ 46F Clouds Question 16, P7-24 (book/static) Homework: Chapter 7. Stock Valuation HW Score: 60.42%, 9.67 of 16 points O Points: 0 of 1 Save Part 1 of 6 Integrative-Risk and Valuation Hamlin Steel Company wishes to determine the value of Craft Foundry, a fim that it is considering acquiring for cash. Hamlin wishes to determine the applicable discount rate to use as an input to the constant-growth valuation model. Craft's stock is not publicly traded. After studying the required returns of firms similar to Craft that are publicly traded. Hamlin believes that an appropriate risk premium on Craft stock is about 9%. The risk-free rate is currently 5%. Craft's dividend per share for each of the past 6 years is shown in the following table: a. Given that Craft is expected to pay a dividend of $3.68 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 4%. a. The required return on Crafts stock is 2%. Round to the nearest whole percentage.)