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?

Name: 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?
Brand: Quizplus
Rating: 4.9 (55 reviews)

Question

Quizplus · Accepted Answer

D) Cost of equity is the next period dividend divided by the price plus the growth rate in dividends. 11ea84dc_f526_981f_9a63_09e4a7a3b473_TB1316_00_TB1316_00

Assume IBM Just Paid a Dividend of $4