What is the equilibrium expected growth rate

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1) Altro Sheet Metals has a bond issue outstanding with 6 years to maturity, a coupon rate of 9.8% (paid semiannually), and a par value of $1,000. The bonds are currently priced to yield 7% per year. What is the market price of each bond?

2) H Manufacturing is expected to pay a dividend of $1.60668 per share at the end of the year (D1 = $1.60668). The stock sells for $44.63 per share, and its required rate of return is 8.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate? Provide your answer as a DECIMAL, with at least four digits of precision.

Reference no: EM131513256

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