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

%