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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? Expected market return is 11% and beta is 1.1.

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