What must be the return on equity ROE

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Eastern Electric currently pays a dividend of about $1.76 per share and sells for $35 a share. a. If investors believe the growth rate of dividends is 2% per year, what is the opportunity cost of capital? b. If investors' opportunity cost of capital is 10%, what must be the growth rate they expect of the firm? c. If the sustainable growth rate is 4% and the plowback ratio is .2, what must be the return on equity ROE?

Reference no: EM13917558

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