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Donut Delites has a beta of 1.06, a dividend growth rate of 3.2 percent, a stock price of $12 a share, and an expected annual

Donut Delites has a beta of 1.06, a dividend growth rate of 3.2 percent, a stock price of $12 a share, and an expected annual dividend of $.84 per share next year. The market rate of return is 11.4 percent and the risk-free rate is 3.8 percent. What is the firm's cost of equity?

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