1. What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 12% of par, and a current market price of (a) $65.00, (b) $78.00, (c) $113.00, and (d) $137.00? Round your answers to two decimal places.
2. ABC Corp. issued 15-year bonds at a coupon rate of 10%. The bonds make semi-annual payments. If these bonds currently sell for $850, what is the yield to maturity (YTM)? Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.