a) Two years ago, you bought a bond with 9 percent coupon rate, paid annually, and 6 years until maturity. The yield to maturity at the time of purchase was 10 percent. Today's yield to maturity is 7 percent. What is your annual return from this investment? Assume coupons are not reinvested.

b) ABC's common stock's annual dividends for the next three years are expected to be $0.60, $0.70, and $0.80. Thereafter, the dividend is expected to grow at a constant rate of 5 percent per year. Stocks of ABC's risk is expected to earn 12 percent annually. How much are you willing to pay for ABC's stock now?

Please keep 2 decimal places in all your calculations.