On their latest income statement, Caitlin's Textiles reported sales of $708,000, costs of $405,200, depreciation of $118,000 and dividends of $103,654. The Company's return on equity is 5.5 percent, and they face a 21 percent tax rate. Assuming the ratio of dividends to earnings in constant, estimate the growth rate of the dividends.

Caitlin's Textiles just paid a dividend of $2.50, and their common stock is priced at $68.70 per share. Calculate the required return on equity.

Requity = ????