2a. Whitmore Inc. just reported earnings of $25 million. It plans to retain 30% of its earnings and pay the rest as dividends. The historical ROE for the firm is 12%, a figure expected to continue for the foreseeable future. Calculate the projected earnings one year from today. (Round to 2 decimals) Enter the full number, e.g. 5 million should be 5,000,000.

2.b. Jokoy Inc. has an issue of preferred stock outstanding that pays a dividend of $15 annually in perpetuity. If this issue currently sells for $120 per share, calculate the required rate of return on the investment. (Enter percentages as decimals and round to 4 decimals)