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4 . Consider the following two financial assets: A US stock that is expected to pay a dividend of $ 7 0 next year, $

4. Consider the following two financial assets:
A US stock that is expected to pay a dividend of $70 next year, $80 in year 2, $90 in year 3, with dividend growth expected to be 5% per annum thereafter;
A US corporate bond with an annual coupon rate of 3%, par (face) value of $1000, and maturity in 3 years time.
If the required return on similar US equities is 10% and on similar US bonds is 5%, calculate the value of the US stock and the US bond.

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