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The ordinary shares of Delta Ltd are quoted at 5 . 0 0 cum - dividend. A dividend of 3 0 p is just about

The ordinary shares of Delta Ltd are quoted at 5.00 cum-dividend. A dividend of 30p is just about to be paid. The company has an annual accounting rate of return of 11%, and each year pays out 28% of its profits after tax as dividends.
Calculate the cost of equity using the Dividend Valuation Model (DVM).

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