Radon Homes' current EPS is $6.50. It was $4.42 5 years ago. The company pays out 40% of its earnings as dividends, and the stock sells or $36. a. Calculate the historical growth rate in earnings. (Hint: This is a 5 - yeargrowth period.)b. Calculate the next expected dividend per share, DI . (Hint: DO = o.4($6.50)= $2.60) Assume that the past growth rate will continue.c. What is Radon's cost of equity, rs ?

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