IBM Expects to Pay a Dividend of $2 Next Year

question 48

Multiple Choice

IBM expects to pay a dividend of $2 next year and expects these dividends to grow at 9% a year. The price of IBM is $80 per share. What is IBM's cost of equity capital?

• A) 9.20%
• B) 10.35%
• C) 10.93%
• D) 11.50%

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Definitions:

Birth Canal

The passageway comprising the cervix, vagina, and vulva through which a fetus travels during birth.

Cultural Practices

The shared activities, rituals, and norms that define the lifestyle of a particular group or society.

Biological Evolution

The process by which species of organisms undergo change over time through genetic variation and natural selection, leading to the emergence of new species.

Punctuated Equilibria

A model of macroevolutionary change that suggests evolution occurs via long periods of stability or stasis punctuated by periods of rapid change.