Over the past 6​ years, Elk County Telephone has paid the dividends shown in the following​ table, The​ firm's dividend per share in 2023 is expected to be ​$6.76.   a.If you can earn 15​% on​ similar-risk investments, what is the most you would be willing to pay per share in 2022​, just after the $6.62 dividend? b. If you can earn only 12​% 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?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter12: The Cost Of Capital
Section: Chapter Questions
Problem 25P
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 Over the past 6​ years, Elk County Telephone has paid the dividends shown in the following​ table, The​ firm's dividend per share in 2023
is expected to be ​$6.76.
 
a.If you can earn 15​% on​ similar-risk investments, what is the most you would be willing to pay per share in 2022​, just after the $6.62 dividend?
b. If you can earn only 12​% 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?
nts, the most you would be willing to pay per share is $
(Round to the
table
ck on the icon here in order to copy the contents of the data table below
pa spreadsheet.)
Year
Dividend per share
2022
$6.62
2021
$6.49
2020
$6.37
2019
$6.24
2018
$6.12
2017
Print
Done
Transcribed Image Text:nts, the most you would be willing to pay per share is $ (Round to the table ck on the icon here in order to copy the contents of the data table below pa spreadsheet.) Year Dividend per share 2022 $6.62 2021 $6.49 2020 $6.37 2019 $6.24 2018 $6.12 2017 Print Done
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