IBM company's Stock and Bond information is provided below: • Bond - Time to Maturity: 20-years; Annual Coupon Rate: 7.0

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Ibm Company S Stock And Bond Information Is Provided Below Bond Time To Maturity 20 Years Annual Coupon Rate 7 0 1 (21.81 KiB) Viewed 23 times

IBM company's Stock and Bond information is provided below: • Bond - Time to Maturity: 20-years; Annual Coupon Rate: 7.00%; PAR Value: $1,000; Currently trading at $1,275.54 • Preferred Stock - Preferred Stock Price: $64.00; Preferred Annual Dividend: $3.50 . Common Stock (Method 1) - Equity Beta: 1.2; Risk-free Rate: 3.00%; Market Risk Premium: 6.00% • Common Stock (Method 2) - Long-run earnings growth: 7.00%; Expected Dividend (in one year): $2.10; Current Stock Price: $57.66 How much is IBM's cost of common stock? Enter your answer in the following format: 0.1234 Hint: Use 'Method1'. Answer is between 0.0938 and 0.1132