10. 5. (Common equity-dividend-growth model) To- day, you looked at The Wall Street Journal and a stock prospectus to read about a company whose stock you follow. You discovered the following: Closing stock price: $14.00 per share Earnings announcement: $3.00 per share Earnings five years ago: $2.00 per share Dividend payout ratio: 40.0% of earnings Flotation cost for a new stock issue: 7.5% of market price Based on the above data: a. Calculate the company's annual growth rate of earnings for the past five years. b. Calculate the anticipated dividend one year from now, assuming no change in growth rate. c. Calculate investors' required rate of return from the company's common stock. d. Calculate the company's cost of retained earnings and cost of a new stock issue. 11