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:

Personality Development

The process by which an individual's personality grows and evolves over time, influenced by a combination of genetic, environmental, and social factors.

Objective Methods

Research or assessment techniques that aim to minimize bias and subjectivity, providing measurable and observable data.

Rational Self-Control

The ability to regulate one's emotions, thoughts, and behaviors in a way that is consistent with long-term goals and societal norms.

Libido

A term used in psychoanalytic theory to describe the energy created by sexual instincts and desire.