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

2014	$9.36
2013	$9.00
2012	$8.65
2011	$8.32
2010	$8.00

The firm's dividend per share next year is expected to be$10.12.

a.If you can earn 14% on similar-risk investments, what is the most you would be willing to pay per share?

b.If you can earn only 11% 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 14% on similar-risk investments, the most you would be willing to pay per share is $_____. (Round to the nearest cent.)

b.If you can earn 11% on similar-risk investments, the most you would be willing to pay per share is $_____. (Round to the nearest cent.)

c.According to the findings in parts a and b, as risk decreases, the required rate of return _________(decreases or increases) , causing the share price to ______(rise or fall) .