Common stock value-constant growth


Elk County Telephone has paid the dividends shown in the following table over the past 6 years Year Dividend per share 2012 $2.87 2011 2.76 2010 2.60 2009 2.46 2008 2.37 2007 2.25 The firm's dividend per share next year is expected to be $3.02. A. If you can earn 13% on similar-risk investments, what is the most you would be willing to pay per share? B. If you can earn only 10% on similar-risk investments, what is the most you would be willing to pay per share?

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Finance Basics: Common stock value-constant growth
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