The Bouchard Company's EPS was $5.40 in 2021, up from $3.26 in 2016. The company pays out 50% of its earnings as dividends, and its common stock sells for $39.00.

1. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places.

   _______ %

2. The last dividend was D₀ = 0.50($5.40) = $2.70. Calculate the next expected dividend, D₁, assuming that the past growth rate continues. Do not round intermediate calculations. Round your answer to the nearest cent.

   $ ________

3. What is Bouchard's cost of retained earnings, r_s? Do not round intermediate calculations. Round your answer to two decimal places.

   _______%