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QUESTION
Gangland Water Guns Company is expected to pay a dividend of $2.10 one year from today.
Gangland Water Guns Company is expected to pay a dividend of $2.10 one year from today. If the firm's growth in dividends is expected to remain at a flat 3 percent forever, then what is the cost of equity capital (in percent) for Gangland if the price of its common shares is currently $17.50?
