Question
Elk County Telephone has paid the dividends shown in the following table over the previous 6 years: Year / Dividend per share 2015 $6.96 2014
Elk County Telephone has paid the dividends shown in the following table over the previous 6 years:
Year / Dividend per share
2015 | $6.96 |
2014 | $6.75 |
2013 | $6.56 |
2012 | $6.37 |
2011 | $6.18 |
2010 | $6.00 |
The firm's dividend per share next year is expected to be $7.16.
A. If you can earn 15% on similar-rish investments, what is the most you would be willing to pay per share? B. If you can earn only 12% on similar -risk investments, what is the most you would be willing to pay per share? c. According to the findings in part a and b, as risk decreases, the required rate of return (increases/decreases), causing the share price to (fall/rise)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started