Rowell products stock is currently for $60 a share. The firms is expected to earn $5.40 per share this year and to pay a year-end dividend of $3.60.

1. If investors require a 9 percent return, what rate of growth must be expected for Rowell?
2. If Rowell reinvests retained earnings in projects whose average return is equal to the stocks expected rate of return, what will be next year earning per share?