Acme Corporation consists of $250$ grocery stores throughout the West. At the beginning of $20$X$5$ its statement of net worth showed the following information: Common Stock $$1,800,000$ and retained earnings $$500,000.$ During the year net income equalled $$160,000.$ Management was undecided on what to do with the income. Acme paid a dividend of $$0\mathrm{.}35$ last year and the stock price is currently $$14\mathrm{.}50.$ Acme has a $6\%$ growth rate in earnings and dividends, and is in the $40\%$ tax bracket.

A$)$ What return on investment would Acme have to earn in order to justify retaining $20$X$5\text{'}$s earnings?

B$)$ What changes would occur in the statement of net worth if a $$\mathrm{.}25$ cash dividend was paid? If a $5\%$ stock dividend were given and no cash dividend was paid?

C$)$ What would EPS be before and after the stock dividend?