Question
Over the past 6 years, Elk County Telephone has paid the dividends shown in the following table, Year Dividend per share 2019 $1.16 2018 $1.13
Over the past 6 years, Elk County Telephone has paid the dividends shown in the following table,
| Year | Dividend per share |
| 2019 | $1.16 |
| 2018 | $1.13 |
| 2017 | $1.09 |
| 2016 | $1.06 |
| 2015 | $1.03 |
| 2014 | $1.00 |
The firms divdend per share in 2020 is expected to be$1.19
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 $1.16 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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Accounting Principles Part 3
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
6th Canadian edition Volume 1
978-1118306802
