Sam's Fine Garments sells jackets and sports coats in suburban malls throughout the country. Business has been good, as indicated

by the twelve$-$year growth in earnings per share. The earnings have grown from $$1\mathrm{.}00$ to $$2\mathrm{.}81.($Use a Financial calculator to arrive at

the answers.$)$

a$.$ Determine the compound annual rate of growth in earnings $(n=12).$ Use Appendix A$.($Round the final answer to $2$ decimal places.$)$

Compound annual rate of growth

b$.$ Based on the growth rate determined in part a$,$ project earnings for next year $(E_1).($Round compound annual rate of growth to $2$

decimal places. Round the final answer to $2$ decimal places.$)$

$E_1$$

c$.$ Assume the dividend payout ratio is $20$ percent. Compute $D_1($Round intermediate calculations to $2$ decimal places. Round the

final answer to $2$ decimal places.$)$

$D_1$$

d$.$ The current price of the stock is $$16.$ Using the growth rate $(g)$ from part a and $D_1$ from part c$,$ compute $K_e.($Round compound

annual rate of growth to $2$ decimal places. Round the final answer to $2$ decimal places.$)$

$K_e,\%$

e$.$ If the flotation cost is $$3\mathrm{.}00,$ compute the cost of new common stock $(K_n).($Round compound annual rate of growth to $2$ decimal

places. Round intermediate calculations to $2$ decimal places. Round the final answer to $2$ decimal places.$)$

$K_n,\%$