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Suppose that Skecher s stock paid a dividend of $ 0 . 8 0 last year and that the dividend is expected to grow by

Suppose that Skecher

s stock paid a dividend of $

0.80

last year and that the dividend is

expected to grow by a constant rate of

6 %

per year. Today Skecher

s stock is trading for

125

a share. What is Skecher

s cost of equity?

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