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Jose owns investment A and 1 bond B . The total value of his holdings is $ 3 , 0 4 0 . 0 0

Jose owns investment A and 1 bond B. The total value of his holdings is $3,040.00. Bond B has a coupon rate of 19.66 percent, par value of $930.00, YTM of 9.64 percent, 11 years until maturity, and semi-annual coupons with the next coupon due in 6 months. Investment A is expected to produce cash flows forever. The next cash flow is expected to be $204.99 in 1 year, and subsequent annual cash flows are expected to increase by g each year forever. The expected return for investment A is 18.71 percent. What is g, the annual growth rate for the annual cash flows paid by investment A?
4.92%(plus or minus 2 bps)
8.94%(plus or minus 2 bps)
13.79%(plus or minus 2 bps)
32.50%(plus or minus 2 bps)
none of the answers are within 2 bps of the correct answer

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