What is the most you would be willing to pay per share

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Reference no: EM131571047

Elk County Telephone has paid the dividends shown in the following table over the previous 6? years:

Year Divident Per Share

2015 $5.35

2014 5.05

2013 4.76

2012 4.49

2011 4.24

2010 4.00

The? firm's dividend per share next year is expected to be $5.67.

A) If you can earn 15% on similar-risk 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 parts a and ?b, as risk? decreases, the required rate of return _________

causing the share price to _______.

Reference no: EM131571047

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