Eastern Electric currently pays a dividend of $1.64 per share and sells for $27 a share.

A. If investors believe the growth rate of dividends is 3% per year, what rate of return do they expect to earn on the stock?

B. If investors' required rate of return is 10%, what must be the growth rate they expect of the firm?

C. If the sustainable growth rate is 5% and the plowback ratio is 0.4, what must be the rate of return earned by the firm on its new investments?