Answer completely and show work.

Question 3 (3 points) A public corporation called AgFin Inc. issues both bonds and stocks that are traded on the public market. Assume the following information: Each unit of a bond has a par value of $1,000 and a maturity of 10 years. The specified annual coupon rate is 4% and the coupon is paid quarterly. The required rate of return for investors is 8% for the bond. A stock of the AgFin Inc. paid the annual dividend payment of $5.00 last year, and the dividend payment for this year is $5.05. The growth rate is assumed to be constant. The required rate of return for investors is 10% for the stock. a) Calculate the bond value. b) Calculate the stock value. c) Discuss why the required rate of return for the bond is lower than the required rate of return for the stock. Be specific about the rights of bondholders/stockholders