a. Suppose a company is expected to pay a dividend of $8.74 next year. The dividend is expected to grow at 3.85% each year. If the stock is currently selling for $104.97, what is the required rate of return on the stock?

b. Several years ago, the ABC Company sold a $1,000 par value bond that now has 20 years to maturity and a 8.00% annual coupon that is paid semiannually. The bond currently sells for $925 and the companys tax rate is 30%. What is the after-tax cost of debt?