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Firm ABC has a beta of 1.38, a stock price of $19, and recently paid an annual dividend of $0.94 a share. The dividend growth

Firm ABC has a beta of 1.38, a stock price of $19, and recently paid an annual dividend of $0.94 a share. The dividend growth rate is 4.5 percent. The market has a 10.6 percent rate of return and a risk premium of 7.5 percent. What is the firm's cost of equity?

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