Chapter 7, Problem 7.11P

a)

Summary Introduction

To determine: The price per share.

b)

Summary Introduction

To determine: The price of stock when the required rate of return is 10 percent.

c)

Summary Introduction

To discuss: The compare and contrast on the findings and impact of changing risk on share value.

Introduction:

Risk refers to the movement in the value of an investment. The movement can be positive or negative. The investor will gain if the movement is positive, and the investor will lose if the movement is negative.