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27) Company Cabernet retains 65% of its earnings. You estimate Company Cabernets growth rate to be 3.5%. What is Cabernets Return on Equity?

28) Company Malbecs bonds mature in 12 years, they pay $65 in annual interest and have a par value of $1,000. Assume the required rate of return on similar bonds is 5.5%.

a) What is the current price of one of these bonds?

b) Are the bonds trading at par, at a discount or at a premium?