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Pegasus Tours plans to pay a dividend of $2.10 next year, and they anticipate that dividend payments will grow by 3% every year for the

Pegasus Tours plans to pay a dividend of $2.10 next year, and they anticipate that dividend payments will grow by 3% every year for the foreseeable future. The market price of the stock is $31. The company's expected rate of return or cost of equity is closest to:

A.

9.77%.

B.

14.33%.

C.

30.10%.

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