ebook Calculation of gL and EPS Spencer Supplies' stock is currently selling for $60 a share. The firm is expected to earn $5.10 per share this year and to pay a year-end dividend of $3.10. a. If investors require a 8.5% return, what rate of growth must be expected for Spencer? Round your answer to two decimal places. 3.33 % b. If Spencer reinvests earnings in projects with average returns equal to the stock's expected rate of return, then what will be next year's EPS? (Hint: GL = ROE X Retention ratio.) Do not round intermediate calculations. Round your answer to the nearest cent. $ 5.10 Hide Feedback