Answer the following question:

A bank reported earnings per share of $2.40 in 1993, and paid dividends per share of $1.06. The earnings were expected to grow 6% a year in perpetuity. The stock had a beta of 1.05 and traded for 10 times earnings. The Treasury bond rate was 7%, the equity risk premium was 5.5%. The payout ratio is 44.17%. The Re is 12.78%. The stable-growth PE is 6.91.

What is the longer-term growth rate? (Answer: 8.004775%) Use excel.