QuestionElk County Telephone's next dividend is \$3.02. Calculate share price for 13% and 10% returns, then compare results.

Studdy Solution
The most you would be willing to pay per share is $37.70 if you can earn13$60.28 if you can earn only10% on similar-risk investments. The higher the required rate of return, the less you would be willing to pay for a share, because you would need a higher dividend yield to achieve the same return. This shows the impact of changing risk on share value as the risk increases, the share value decreases.