IBM's Stock Price Is $22, It Is Expected to Pay

question 87

Multiple Choice

IBM's stock price is $22, it is expected to pay a $2 dividend, and analysts expect the firm to grow at 10 percent per year for the next five years. TDI's stock price is $10, it is expected to pay a $1 dividend, and analysts expect the firm to grow at 12 percent per year for the next five years. What is the difference in the two firms' required rates of return?

• A) 2.91 percent
• B) 1.82 percent
• C) 2.03 percent
• D) 3.23 percent

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Definitions:

Continuous Cardiac Monitoring

The ongoing process of tracking the heart's activity to detect any abnormalities or changes in heart rhythm.

COPD

Chronic Obstructive Pulmonary Disease, a group of lung conditions that cause breathing difficulties including emphysema and chronic bronchitis.

Motor Skills

The ability to perform movements with the body, often categorized into fine motor skills (small movements, such as writing) and gross motor skills (larger movements, such as walking).

Oxygen

A chemical element essential for respiration in many living organisms, represented by the symbol O.