IBM Expects to Pay a Dividend of $5 Next Year

question 73

Multiple Choice

IBM expects to pay a dividend of $5 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) 3.77%
• B) 5.02%
• C) 7%
• D) 12.56%

---

Definitions:

Pensive

Reflective and thoughtful, often in a melancholy or solemn way.

Anxiety Disorders

A group of mental health conditions characterized by excessive fear or anxiety that affects a person's daily activities.

Personality Factors

Fundamental traits or characteristics that consistently influence an individual's behavior and attitudes, forming the basis of personality.

Abusive Parenting

A pattern of behavior where a caregiver causes physical, emotional, or psychological harm to a child, impacting their health and well-being.