Given with the following informations I need to calculate the sustainable growth rate. How can I compute the ROE in order to calculate sustainable growth rate with given information below. I need step by step computation.

-The preferred stock issued at a book value of $100 per share,was now trading for $70 per share.

-The common stock traded for $40 a share.Next years EPS would be about $ 4 and dividends per share $2.(Ten million shares are outstanding).The company traditionally paid out 50% of earnings.

- Earnings and dividends had grown steadily at 6% to 7% per year,in line with the companys sustainable growth rate. Risk free rate is 7% and market risk premium is 8%.Beta of the company is 0.5 .The risk free rate is 7% and market risk premium is 8%.

Balance Sheet

Assets Liabilities and Net worth

Working Capital 200 Bank Loan 120

Plant &Equipment 360 Long-term debt 80

Other Assets 40 Preferred Stock 100

Common Stock&Retained Earnings 300

Total Assets 600 Total Liab & Equity 600

\begin{tabular}{lrrr} & Amount (in millions) & Percent of Total & Rate of Return \\ \cline { 2 - 4 } Bank loan & $120 & 20% & 8% \\ Bond issue & 80 & 13.3 & 7.75 \\ Preferred stock & 100 & 16.7 & 6 \\ Common stock & 300 & 50 & 16 \\ & $600 & 100% \\ \hline \end{tabular}