a. A 10-year maturity bond making annual coupon payments with a coupon rate of 12% has a convexity of 54.36. The current yield to maturity of the bond is 8% and the last coupon payment was made today. What is the current price of this bond? (4 points) b. If the yield to maturity falls to 7% immediately, what price would be predicted by the duration rule? (4 points) c. If the yield to maturity falls to 7% immediately, what price would be predicted by the duration-with convexity rule? (4 points) Suppose you are valuing a Firm A's stock. Firm A is expected to have an EPS of $2.5 and pay out 80% of its earnings. Firm A earns 10% on its reinvested capital. Firm A's cost of equity is 10% whereas its WACC is 8%. What is the value of Firm A's stock? (4 points) What is the present value of growth opportunities (PVGO)? (4 points) Can you explain why Firm A's PVGO is what you calculated in part b? (4 points) a. c