An all-equity firm had a dividend expense of $20,000 last year. The market value of the firm is $600,000 and the dividend is expected to increase at 5% each year. What is the cost of equity for this firm?

A) 6.80%
B) 7.65%
C) 8.50%
D) 9.35%

Answer: C

Business

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Allen has a store that rents only formal wear to men, such as tuxedoes. Allen sells to a highly segmented market based on ________

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