Question
IBM company's financial information is provided below: Current Stock Price: $30.00; Expected Annual Dividend in 1-Year: $1.50 Constant Growth Rate of Earnings: 3.00%; New Equity
IBM company's financial information is provided below:
Current Stock Price: $30.00;
Expected Annual Dividend in 1-Year: $1.50
Constant Growth Rate of Earnings: 3.00%;
New Equity Flotation Cost: 7.00%
How much is IBMs cost of common equity if all of its equity comes from retained earnings?
Enter your answer in the following format: 0.1234;
Hint: Answer is between 0.072 and 0.0896
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Valuation Workbook Step By Step Exercises And Tests To Help You Master Valuation
Authors: McKinsey & Company Inc.
7th Edition
1119611814, 978-1119611813
