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Using the dividend discount model, the cost of equity capital for a company which will pay a dividend of $2 next year, has a payout

Using the dividend discount model, the cost of equity capital for a company which will pay a dividend of $2 next year, has a payout ratio of 35%, a return on equity of 15%, and it current stock price of $40, is

a.12.25

b. less than 10.00%

c. 14.75%

d. 10.51%

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