Question
Over the past 6 years, Elk County Telephone has paid the dividends shown in the following table: 2019 8.93 2018 8.51 2017 8.10 2016 7.72
Over the past 6 years, Elk County Telephone has paid the dividends shown in the following table:
2019 8.93 2018 8.51 2017 8.10 2016 7.72 2015 7.35 2014 7.00
The firm's dividend per share in 2020 is expected to be $9.38.
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 $8.93 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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