Eastern Electric currently pays a dividend of about $1.96 per share and sells for $33 a share.
If investors believe the growth rate of dividends is 4% per year, what is the opportunity cost of capital?
If investors' opportunity cost of capital is 10%, what must be the growth rate they expect of the firm?
If the sustainable growth rate is 5% and the plowback ratio is .5, what must be the return on equity ROE?