Direct materials $ $84,000$ Direct labor $ $42,500$ Variable manufacturing overhead $ $21,000$ Fixed manufacturing overhead $32,500$ Total manufacturing overhead $ $53,500$ Variable selling expense $ $15,000$ Fixed selling expense $24,000$ Total selling expense $ $39,000$ Variable administrative expense $ $5,500$ Fixed administrative expense $28,000$ Total administrative expense $ $33,500$Eastern Electric currently pays a dividend of $$1\mathrm{.}86$ per share and sells for $$33$ a share.

a$.$ If investors believe the growth rate of dividends is $2\%$ per year, what rate of return do they expect to earn on the stock?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.

Rate of return

$\%$

b$.$ If investors' required rate of return is $15\%,$ what must be the growth rate they expect of the firm?

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.

Growth rate

c$.$ If the sustainable growth rate is $4\%$ and the plowback ratio is $0\mathrm{.}8,$ what must be the rate of return earned by the firm on its new

investments?

Note: Enter your answer as a percent rounded to $2$ decimal places.

Rate of return