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

question 90

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% per year for the next 5 years. TDI's stock price is $10, it is expected to pay a $1 dividend, and analysts expect the firm to grow at 12% per year for the next 5 years. What is the difference in the two firms' required rate of returns?

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

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Definitions:

Persuasion

The art of influencing or convincing others to believe or do something through reasoning or the use of emotional appeal.

Marketplace

An open space or online platform where buyers and sellers come together for the exchange of goods and services.

AIDA Plan

A marketing strategy that stands for Attention, Interest, Desire, and Action, guiding advertisers in capturing the audience's journey from awareness to purchase.

Product Benefit

refers to the advantage or positive outcome that users gain from using a product.