Question
Common stock valueConstant growthPersonal Finance ProblemOver the past 6 years, Elk County Telephone has paid the dividends shown in the following table, LOADING... . The
Common stock
valueConstant
growthPersonal Finance ProblemOver the past 6 years, Elk County Telephone has paid the dividends shown in the following table,
LOADING...
. The firm's dividend per share in
2020
is expected to be
$6.33.
a.If you can earn
11%
on similar-risk investments, what is the most you would be willing to pay per share in
2019,
just after the
$6.08
dividend?
b.If you can earn only
8%
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?
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Cash Flow Stock Investing
Authors: Randall Stewart
1st Edition
1980883300, 978-1980883302
