Assume that the return on tax-exempt securities is 0.09 and that t_p = 0.3, t_g = 0.20, and t_c = 0.35, where t_g is the rate on capital gains, t_c is the corporate tax rate, and t_p is the personal tax rate on dividends and interest.

Equilibrium conditions exist.

a. The return to investors on taxable bonds (with equal risk) raised as new capital can be expected to be ____________________.

b. The return to investors on common stock (all capital gains) raised as new capital can be expected to be ____________________.