$($Measuring growth$)$ Solarpower Systems earned $$20$ per share at the beginning of the year and paid out $$10$ in dividends to shareholders $($so$,D_0=$$$10)$ and retained $$10$ to invest in new

projects with an expected return on equity of $21$ percent. In the future, Solarpower expects to retain the same dividend payout ratio, expects to earn a return of $21$ percent on its equity invested

new projects, and will not be changing the number of shares of common stock outstanding.

a$.$ Calculate the future growth rate for Solarpower's earnings.

b$.$ If the investor's required rate of return for Solarpower's stock is $13$ percent, what would be the price of Solarpower's common stock?

c$.$ What would happen to the price of Solarpower's common stock if it raised its dividends to $$13$ and then continued with that same dividend payout ratio permanently? Should Solarpower ma

this change? $($Assume that the investor's required rate of return remains at $13$ percent.$)$

d$.$ What would happened to the price of Solarpower's common stock if it lowered its dividends to $$3$ and then continued with that same dividend payout ratio permanently? Does the constant

dividend growth rate model work in this case? Why or why not? $($Assume that the investor's required rate of return remains at $13$ percent and that all future new projects will earn $21$ percent.$)$

a$.$ What is the future growth rate for Solarpower's earnings?

$10\mathrm{.}5\%($Round to two decimal places.$)$

b$.$ If the investor's required rate of return for Solarpower's stock is $13\%,$ what would be the price of Solarpower's common stock?

$ $($Round to the nearest cent.$)$

c$.$ What would happen to the price of Solarpower's common stock if it had raised its dividends to $$13(D_0=$$$13)$ and then continued with that same dividend payout ratio permanently?

I $($Round to the nearest cent.$)$