Ibm Corp Expects To Earn 8 40 Per Share In The Next Year Ibm Follows A Policy Of

Ibm corp. expects to earn $8.40 per share in the next year. ibm follows a policy of paying out 60% of all earnings as dividends, and reinvesting the rest. ibm’s dividends and earnings are expected to grow at a constant rate of 4% in the future. you require a 9% rate of return on stock investments of similar risk. what is your estimate of the market value of ibm stock?

Prof. Angela

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