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%

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Definitions:

Pressure Changes

Variations in the force exerted by a fluid or gas on its surroundings, which can affect weather, physical health, and mechanical operations.

Auditory System

The sensory system that includes the ears and the brain structures that process sound.

Sound

Vibrations that travel through the air or another medium and can be heard when they reach a person's or animal's ear.

Volley Principle

A theory explaining how auditory neurons work together to convert high-frequency sound waves into electrical signals by firing in rapid succession.