(Measuring growth) Thomas, Inc.'s return on equity is 14 percent and management has plans to retain 22 percent of earnings for investment in the company a. What will be the company's growth rate? b. How would the growth rate change if management (1) increased retained earnings to 32 percent or (ii) decreased retention to 15 percent? a. The company's growth rate will be \%. (Round to two decimal places.) b. (1) If management increased retained earnings to 32%, the growth rate would be %. (Round to two decimal places.) b. (ii) If management decreased retention to 15%, the growth rate would be %. (Round to two decimal places.) (Measuring growth) Green Gadgets Inc. is trying to decide whether to cut its expected dividend for next year from $7 per share to $4 per share in order to have more money to invest in new projects. If it does not cut the dividend, Green Gadgets' expected rate of growth in dividends is 5 percent per year and the price of their common stock will be $110 per share. However, if it cuts its dividend, the dividend growth rate is expected to rise to 8 percent in the future. Assuming that the investor's required rate of return for Green Gadgets' stock does not change, what would you expect to happen to the price of its common stock if it cuts the dividend to $4? Should Green Gadgets cut its dividend? Support your answer as best you can. a. What is the investor's required rate of return for Green Gadgets' stock? [% (Round to two decimal places.) b. Assuming that the investor's required rate of return for Green Gadgets' stock does not change, what would you expect to happen to the price of its common stock if it cuts the dividend to $4? $ (Round to the nearest cent.) c. Should Green Gadgets cut its dividend? (Select from the drop-down menus.) Green Gadgets cut the dividend because cutting the dividend will increse decrese v the value of the common stock. increse decrese