In mid$-2009,$ Rite Aid had CCC$-$rated, $8-$year bonds outstanding with a yield to maturity of $17\mathrm{.}1\%.$ At the time, similar maturity Treasuries had a yield of $3\mathrm{.}3\%.$ Suppose the market risk premium is $6\%$ and you believe Rite Aid's bonds have a beta of $0\mathrm{.}39.$ The expected loss rate of these bonds in the event of default is $55\%.$

a$.$ What annual probability of default would be consistent with the yield to maturity of these bonds in mid$-2009?$

b$.$ In mid$-2015,$ Rite Aid's bonds had a yield of $7\mathrm{.}2\%,$ while similar maturity Treasuries had a yield of $1\mathrm{.}5\%.$ What probability of default would you estimate now?

a$.$ What annual probability of default would be consistent with the yield to maturity of these bonds in mid$-2009?$

The required return for this investment in mid$-2009$ is

$\%.($Round to two decimal places.$)$