ck Valuation $($HW$)$

Question $4,$ P$7-12($similar to$)$

HW Score: $62\mathrm{.}5\%,5$ of $8$ points

Part $1$ of $3$

Points: $0$ of $1$

Common stock value $-$ Constant growth Personal Finance Problem Over the past $6$ years, Elk County Telephone has paid the dividends shown in the following table,

The firm's dividend per

share in $2023$ is expected to be $$7\mathrm{.}50.$

a$.$ If you can eam $16\%$ on similar$-$risk investments, what is the most you would be willing to pay per share in $2022,$ just after the $$7\mathrm{.}01$ dividend?

b$.$ If you can eam only $13\%$ on similar$-$risk investments, what is the most you would be willing to pay per share?

c$.$ Compare your findings in parts a and $b,$ what is the impact of changing risk on share value?

a$.$ If you can earn $16\%$ on similar$-$risk investments, the most you would be willing to pay per share is $9($Round to the nearest cent.$)$