Eastern Electric currently pays a dividend of about $1.64 per share and sells for $27 a...

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Eastern Electric currently pays a dividend of about $1.64 pershare and sells for $27 a share.
a. If investors believe the growth rate ofdividends is 3% per year, what rate of return do they expect toearn on the stock? (Do not round intermediate calculations.Enter your answer as a percent rounded to 2 decimalplaces.)
b. If investors' required rate of return is10%, what must be the growth rate they expect of the firm?(Do not round intermediate calculations. Enter your answeras a percent rounded to 2 decimal places.)
c. If the sustainable growth rate is 5% and theplowback ratio is .4, what must be the rate of return earned by thefirm on its new investments? (Enter your answer as apercent rounded to 2 decimal places.)

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Requirement a Rate of Return As per Dividend Discount Model the Required Rate of Return is calculated as follows Required Rate of Return D01 g P0 g Where Last year Dividend D0 164 per share Dividend Growth See Answer

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Eastern Electric currently pays a dividend of about $1.64 pershare and sells for $27 a share.a. If investors believe the growth rate ofdividends is 3% per year, what rate of return do they expect toearn on the stock? (Do not round intermediate calculations.Enter your answer as a percent rounded to 2 decimalplaces.)b. If investors' required rate of return is10%, what must be the growth rate they expect of the firm?(Do not round intermediate calculations. Enter your answeras a percent rounded to 2 decimal places.)c. If the sustainable growth rate is 5% and theplowback ratio is .4, what must be the rate of return earned by thefirm on its new investments? (Enter your answer as apercent rounded to 2 decimal places.)