Elk County Telephone has paid the dividends shown below for the past 6 years: Year Div Per
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Question:
Elk County Telephone has paid the dividends shown below for the past 6 years:
Year Div Per Share
2015 $9.27
2014 $9.00
2013 $8.74
2012 $8.49
2011 $8.24
2010 $8.00
The company's dividend per share next year is expected to be $9.55
a. If you can earn 15% on similar risk investments, the most you would be willing to pay per share
b. If you can earn 12% on investments of similar risk, the most you would be willing to pay per share is
C. Based on the results of parts a and b, as risk decreases, the required rate of return (Increases/Decreases), causing the price to (rise/decrease)
Related Book For
Principles of Managerial Finance
ISBN: 978-0134476315
15th edition
Authors: Chad J. Zutter, Scott B. Smart
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