*1238. Management action and stock value-REH Corporation's most recent dividend was $2.65 per share, its expected annual rate of dividend growth is 5%, and the required return is now 15%. A variety of proposals are being considered by management to redirect the firm's activities. Determine the impact on share price for each of the following proposed actions.

a.Do nothing, which will leave the key financial variables unchanged.

b.Invest in a new machine that will increase the dividend growth rate to 9% and lower the required return to 12%.

c.Eliminate an unprofitable product line, which will increase the dividend growth rate to 6% and raise the required return 18%.

d.Merge with another firm, which will reduce the growth rate to 3% and raise the required return to 19%.

e. Acquire a subsidiary operation from another manufacturer. The acquisition should increase the dividend growth rate to 9% and increase the required return to 18%.

*5894. Common stock valueConstant growth-Personal Finance Problem-Over the past 6 years, Elk County Telephone has paid the dividends shown in the following table (down). The firm's dividend per share in 2023 is expected to be $2.39.

a.If you can earn 12% on similar-risk investments, what is the most you would be willing to pay per share in

2022, just after the $2.32 dividend?

b.If you can earn only 9% 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?

thanks in advance, big thumbs up after get the solution :)

x Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Year 2022 2021 2020 2019 2018 2017 Dividend per share $2.32 $2.25 $2.10 $2.12 $2.08 $2.00 Print Done