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Suppose your company has an equity beta of 2. The market risk premium is expected to be 8,5% and the current risk-free rate is 10%.

Suppose your company has an equity beta of 2. The market risk premium is expected to be 8,5% and the current risk-free rate is 10%. And we have used analysts estimates to determine that the market believes our dividends will grow at 8% per year and our last dividend was R4. Our shares are currently selling for R20,25. What is our cost of equity?

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