Question: Common stock value long dash Constant growth Personal Finance Problem Elk County Telephone has paid the dividends shown in the following table over the previous

Common stock

valuelong dashConstant

growthPersonal Finance ProblemElk County Telephone has paid the dividends shown in the following table over the previous 6 years:

LOADING...

(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

Dividend per share

20152015

$2.212.21

20142014

$2.162.16

20132013

$2.122.12

20122012

$2.082.08

20112011

$2.042.04

20102010

$2.002.00

. The firm's dividend per share next year is expected to be

2.25.

a.If you can earn

15%

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

12%

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

15%

on similar-risk investments, the most you would be willing to pay per share is

$nothing.

(Round to the nearest cent.)

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