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?

c. Compare and contrast your findings in parts a and b, and discuss the impact of changing risk on share value.