ection II: Problems State your answer clearly. Illegible handwriting will NOT e marked. 1. (This question is not cumulative) [12 marks] (a) Julia bought an annual coupon bond with a 7.5% coupon rate and six years of maturity for $1,050. Three years later, she sold this bond when the yield was 8.5%. What was her annual rate of return from her bond investment? Assume she invested any coupon income from this bond at a rate of 4 percent. (b) Analysts expect the dividends of Rusk Inc. to grow at 30% for two years, and then grow at a constant rate of 5%. The dividend just paid was $1. The required rate of return for Rusk Inc. is 14%. How much do you expect the stock price of Rusk Inc. would be in 2 years? How much are you willing to pay for the stock now