Task 4: Stock and Bond Valuation (20 marks] 1. A company just paid 4 dividend (D) which is going to grow up 2.5% (g) annually. Assuming that required rate of return (r) is 5% p.a., what is the current price of the stock using DDM? From the effective items in valuation of stock (i.e., Do, 9 and r) which one could change tomorrow or in the near future which significantly impacts on the price of stock? [10 marks] 2. A corporate bond has a face value (FV) of 1000, time to maturity (TTM) of 10 years and coupon rate (Cr) of 2.5% p.a.. Assuming that required rate of return (r) is 5%, what should be the current price of the bond? From the effective items in calculating the bond price (i.e., Cr, FV and r) which one could change tomorrow or in the near future which significantly impacts on the price of the bond? [10 marks]