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undefined You have a portfolio that consists of 1000 stocks of XYZ and a single corporate bond. XYZ has just paid a dividend of $1.30.
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You have a portfolio that consists of 1000 stocks of XYZ and a single corporate bond. XYZ has just paid a dividend of $1.30. It is believed that this will grow by 10% a year for 5 years and then grow at 2% in perpetuity. The required rate of return for the stock is 5%. The corporate bond is a 20-year 6% annual coupon bond with a yield to maturity of 7% and a face value of $50000. Use this information to answer the following questions. A. B. C. D. What is the value of one stock of XYZ today? (5 Marks) What is the value of the corporate bond today? (5 Marks) What are the weightings of your portfolio? (5 Marks) What will the weightings be after 10 yearsStep by Step Solution
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