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Suppose Dexter's stock sells for $ 2 1 , next year's dividend is expected to be $ 1 , Dexter's expected ROE is 1 2

Suppose Dexter's stock sells for $

21,

next year's dividend is

expected to be $

1,

Dexter's expected ROE is

12 %,

and Dexter is

expected to pay out

40 %

of its earnings. What is Dexter's cost of

equity?

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