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IBM just paid a dividend of $2.5 and expects these dividends to grow at 8% a year. The price of IBM is $90 per share.

IBM just paid a dividend of $2.5 and expects these dividends to grow at 8% a year. The price of IBM is $90 per share. What isIBM's cost of equitycapital?

A.

3.3%

B.

10.45%

C.

8%

D.

11%

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Question

IBM just paid a dividend of $2.5 and expects these dividends to grow at 8% a year. The price of IBM is $90 per share.

IBM just paid a dividend of $2.5 and expects these dividends to grow at 8% a year. The price of IBM is $90 per share. What isIBM's cost of equitycapital? A. 3.3% B. 10.45% C. 8% D. 11%

Step by Step Solution

Step: 1

Get Instant Access with AI-Powered Solutions

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Step: 3

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Recommended Textbook for

Fundamentals of biochemistry Life at the Molecular Level

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IBM just paid a dividend of $2.5 and expects these dividends to grow at 8% a year. The price of IBM is $90 per share. What isIBM's cost of equitycapital?

A.

3.3%

B.

10.45%

C.

8%

D.

11%