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%

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Definitions:

Individualized Consideration

A component of transformational leadership, focusing on the leader's attention to and support for the individual needs, abilities, and development of followers.

Inspirational Motivation

The ability to inspire and motivate others towards achieving a shared vision or goal.

Transformational Leadership

A leadership approach that causes change in individuals and social systems, inspiring followers to exceed their own interests for the good of the group or organization.

Moral Principles

Foundational ethical guidelines that govern behavior and decision-making, based on notions of right and wrong.