What is this firm cost of equity

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Reference no: EM131560208

Allouez Company's common stock is currently priced at $40.00 a share. The company just paid $2.30 per share as its annual dividend (D0). The dividends have been increasing by 4% annually and are expected to do so indefinitely. What is this firm's cost of equity if they have a 30% tax rate? Pick the closest answer available.

a) 7%

b) 9.98%

c) 9.75%

d) 9.63%

e) 8.15%

Reference no: EM131560208

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