P711 Common stock value: Constant growth Elk County Telephone has paid the dividends shown in the following
Question:
P7–11 Common stock value: Constant growth Elk County Telephone has paid the dividends shown in the following table over the past 6 years.
The firm’s dividend per share next year is expected to be $3.02.
a. If you can earn 13% on similar-risk investments, what is the most you would be willing to pay per share?
b. If you can earn only 10% on similar-risk investments, what is the most you would be willing to pay per share?
c. Compare and contrast your findings in parts a and
b, and discuss the impact of changing risk on share value.
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Related Book For 
Principles Of Managerial Finance
ISBN: 9780133546408
7th Edition
Authors: Lawrence J Gitman, Chad J Zutter
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