P7-22 (similar to) Question Help Integrative Risk and valuation Giant Enterprises' stock has a required return of 11.7%. The company, which plans to pay a dividend of $2.54 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2009-2015 period, when the following dividends were paid: a. If the risk-free rate is 6%, what is the risk premium on Glant'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.) i Data Table (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet.) Year 2015 2014 2013 2012 2011 2010 2009 Dividend per Share $2.42 $2.30 $2.19 $2.09 $1.99 $1.90 $1.81 Print Done Enter your answer in the answer box and then click Check Answer. 2