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9 Feb 2019

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 $49.56

Expected dividend per share next year $ 1.36

Constant annual dividend growth rate 8%

Risk-free rate of return 4%

The risk premium on Foster stock is ______________ % (Round to two decimal places)

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Keith Leannon
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11 Feb 2019

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