The dividends and earnings of AG stores plc over the last five years have been as follows.

Year Dividends ($) Earnings ($)

2013 150,000 400,000

2014 192,000 510,000

2015 206,000 550,000

2016 245,000 650,000

2017 262,350 700,000

The company is financed entirely by equity and there are 1,000,000 shares in issue, each with a market value of $3.35 ex div.

a). what is the dividend growth rate over the last four years? Use the formula-Do(1+g)^n

b). what is the cost of equity?

c). what implications does the dividend growth appear to have for earnings retentions?