IBM Expects to Pay a Dividend of $4 Next Year

question 66

Multiple Choice

IBM expects to pay a dividend of $4 next year and expects these dividends to grow at 7% a year.The price of IBM is $90 per share.What is IBM's cost of equity capital?

• A)9.65%
• B)10.23%
• C)10.89%
• D)11.44%
• E)12.36%