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Cygnus has a dividend cover ratio of 4.0 times and expects zero growth in dividends. The company has one million $1 ordinary shares in issue

  1. Cygnus has a dividend cover ratio of 4.0 times and expects zero growth in dividends. The company has one million $1 ordinary shares in issue and the market capitalization (value) of the company is $50 million. After-tax profits for next year are expected to be $20 million. What is the cost of equity capital?

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