The Bouchard Company's EPS was $6.80 in 2018, up from $3.34 in 2013. The company pays out 50% of its earnings as dividends, and its common stock sells for $31.00.

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($6.80) = $3.40. 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. _______ %