I worked out this answer and just need to know if the end results are correct

P722 Integrative: Risk and valuation Given the following information for the stock of Foster Company, calculate the risk premium on its common stock.

Current price per share of common	$50.00
Expected dividend per share next year	$ 3.00
Constant annual dividend growth rate	6.5%
Risk-free rate of return	4.5%

Constant growth model also referred to as the Gordon model is used to find the value of constant growth stock.

P_{0 =} D₀(1 + g)/(r_s g) = D₁/(r_s g)

D₁ = next expected divided

R_s = the required rate of return

g the constant growth rate

P₀ Current Price

Solution

Part 1

Using constant growth model, the expected rate of return

r_s= D_1/P₀ + g

Current price, P₀= $50.00

Growth rate, g = 6.5%

Expected dividend, D₁= $3.00

Expected rate of return (r_s) = $3/$50 + 6.5%

=6+6.5

= 12.5%

Part 2

Risk-free rate, r_RF=4.5%

Expected rate of return, r_s=12.5%

The equation is as follows: rs = r_RF+RP

12.5% = 4.5% + RP

12.5%-4.5%= RP

Therefore, risk premium is 8%.