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A firm is expected to pay an annual dividend of $5.84 on its common stock in one year. The current stock price is $35 per

A firm is expected to pay an annual dividend of $5.84 on its common stock in one year. The current stock price is $35 per share, while the price next year is expected to be $40 per share. The company is expected to increase its dividend by 3 percent annually. What is the company's cost of equity?

17.60%

14.6%

19.69%

20.19%

16.68%

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