Radon Homes' current EPS is $6.40. It was $3.55 5 years ago. The company pays out 30% of its earnings as dividends, and the stock sells for $31.

a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places.

b. Calculate the next expected dividend per share, D. (Hint: Do = 0.30($6.40) = $1.92.) Assume that the past growth rate will continue. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. What is Radon's cost of equity, rs? Do not round intermediate calculations. Round your answer to two decimal places.