Common stock

valueConstant

growthPersonal Finance ProblemOver the past 6 years, Elk County Telephone has paid the dividends shown in the following table (BELOW) The firm's dividend per share in 2020 is expected to be $1.50.

a.If you can earn 14% on similar-risk investments, what is the most you would be willing to pay per share in 2019, just after the $1.40 dividend?

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?

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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 earn11% 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 (INCREASE OR DECREASES?), causing the share price to (RISE OR FALL?)