Eastern Electric currently pays a dividend of about $1.71 per share and sells for $25 a share.

a.	If investors believe the growth rate of dividends is 4% per year, what rate of return do they expect to earn on the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Rate of return

%

b.	If investors' required rate of return is 10%, what must be the growth rate they expect of the firm? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Growth rate

%

c.	If the sustainable growth rate is 5% and the plowback ratio is .5, what must be the rate of return earned by the firm on its new investments? (Round your answer to 2 decimal places.)

Rate of return

%