Kahn Inc. has a target capital structure of 70% common equity and 30% debt to fund its $8 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 13%, a before-tax cost of debt of 12% and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $2, and the current stock price is $28.

a.) What is the company's expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places.

b.) If the firm's net income is expected to be $1.1 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations. Round your answer to two decimal places.

Growth rate= (1-Payout ratio)ROE

NO EXCEL or Calculator, FORMULA APPROACH ONLY