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Weekend Warriors Inc. has 20% debt and 80% equity in its capital structure. The firm's estimated after-tax cost of debt is 6% and its estimated
Weekend Warriors Inc. has 20% debt and 80% equity in its capital structure. The firm's estimated after-tax cost of debt is 6% and its estimated cost of equity is 14%. Determine the firm's wer average cost of capital (WACC) ted Weekend Warriors weighted average cost of capital WACC is % Round to two decimal places. Integrative-Risk and valuation Giant Enterprises' stock has a required return of 13.1%. The company, which plans to pay a dividend of $2.56 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 5%, 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 c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giants stock. Data Table a. If the risk-free rate is 5%, 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. (S A decrease in the risk premium would Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year 2019 2018 2017 2016 2015 2014 2013 Dividend per Share $2.44 $2.32 $2.21 $2.11 $2.01 $1.91 $1.82 V the required rate of return, which in turn would
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