(Common stock valuation) Dalton Inc. has a return on equity of 11.1 percent and retains 55 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.50 and the stock is currently selling for $44.

a. What is the growth rate for Dalton Inc.?

b. What is the expected return for Dalton's stock?

c. If you require a 12 percent return, should you invest in the firm?

a. What is the growth rate for Dalton Inc.? (Round to two decimal places.)