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ABC Co is about to pay an ordinary dividend of 10p per share and currently pays out 30% of earnings as dividends. They have an

ABC Co is about to pay an ordinary dividend of 10p per share and currently pays out 30% of earnings as dividends. They have an average rate of return (ARR) of 20% and their current share price is 3.08.

What is ABC Cos cost of equity?

A 9.6%

B 17.4%

C 17.7%

D 17.8%

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