Cost of Equity Radon Homes' current EPS is $7.10. It was $4.13 5 years ago. The company pays out 30% of its earnings as dividends, and the stock sells for $37. a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places. % E b. Calculate the next expected dividend per share, D. (Hint: Do 0.30($7.10) $2.13.) Assume that the past growth rate will continue. Do not round intermediate calculations. Round your answer to the nearest cent. $ = c. What is Radon's cost of equity, rs? Do not round intermediate calculations. Round your answer to two decimal places. %

Radon Homes' current EPS is $7.10. It was $4.135 years ago. The company pays out 30% of its earnings as dividends, and the stock sells for $37. a. Calculate the historical growth rate in eamings. (Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places. % b. Calculate the next expected dividend per share, D1. (Hint: D0=0.30($7.10)=$2.13.) Assume that the past growth rate will continue. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. What is Radon's cost of equity, r3 ? Do not round intermediate calculations. Round your answer to two decimal places