Question: Please solve with equations not excel. 12. IBM expects earnings this year of $5.00 per share, and it plans to pay a $1.50 dividend to

Please solve with equations not excel.

12. IBM expects earnings this year of $5.00 per share, and it plans to pay a $1.50 dividend to shareholders. IBM will retain $3.50 per share of its earnings to reinvest in new projects that have an expected return of 12.0% per year. Suppose IBM will maintain the same dividend payout rate, retention rate, and return on new investments and will not change its number of outstanding shares. If IBM's equity cost of capital is 11.0%, what price would you estimate for IBM stock? A. $57.69 B. $134.62 C. $20.27 D. $47.30

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