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Suppose the ABC paid a dividend of $ 4 per share last year. The stock currently sells for $ 6 0 per share. You estimate

Suppose the ABC paid a dividend of $

4

per share last year. The stock currently sells for $

60

per share. You estimate that the dividend will grow steadily at a rate of

6 %

per year into the indefinite future. What is the cost of equity capital for ABC?

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