Investors have invested $30,000 in common equity in a company. Given the risk inherent in the company, the investors expect to earn a 13 percent return. In addition, the investors expect the company to return all income to investors in the form of dividends. The company earns $4,500 the first year. For this company, how much is the annual the computed residual income? A company is expected to generate $175,000 in earnings next period and has a current market value of equity equal to $875,000. Assume that the geometric growth rate in expected future earnings is 4% per year. What is the earnings capitalization rate that is consistent with these facts