There is a corporate bond with 5-year maturity. Its par value is $1000. Its coupon is paid semiannually with $5 each time. And the stock price of this firm is $50 per share now. The share outstanding is 20,000 shares. Suppose this firm keeps paying dividends annually. And the dividend is growing each year. And shareholders got $2 as the dividend per share for this year. The firm's Return of Equity is 0.06. Its Plowback Ratio is 0.4. The inflation rate is 2%. The nominal interest rate is 5%. All interest rates are compound interest rates.

a. What are the present values of the bond and the stock?

b. What is the Present Value of Growth Opportunities for the stock?

c. Suppose I bought this bond at the beginning. What is the Yield to Maturity and the Internal Rate of Return of the bond if I sell this bond at the end of the third year with the price of $ 944?