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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

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 is the opportunity cost of capital? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Cost of Capital %

b.

If investors' opportunity cost of capital 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 return on equity ROE? (Round your answer to 2 decimal places.)

ROE %

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