p7-22

atnu ldise thc required return to 16%. e. Acquire a subsidiary operation from another manufacturer. The acquisition should increase the dividend growth rate to 8% and increase the required return to 1 7%. P7-22 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 Expected dividend per share next year 3.00 Constant annual dividend growth rate Risk-free rate of return $50.00 6.5% 4.5% P7-23 Integrative: Risk and valuation Giant Enterprises' stock has a required return of