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Assume IBM Just Paid a Dividend of $4

Question 38

Multiple Choice

Assume IBM just paid a dividend of $4.50 and expects these dividends to grow at 8% a year. The price of IBM is $100 per share. What is IBM's cost of equity capital?


A) 3.86%
B) 8%
C) 12.22%
D) 12.86%

Correct Answer:

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