2.Your father has 500 shares of 'Premier Goods', which is expected to pay a $2.38 dividend per share next year.Expected dividend growth rate is 6% per year forever.He also has 600 shares of 'Sunshine Real Estates', which is predicted to have a dividend growth rate of 4% per year forever.'Sunshine Real Estates' is now selling for $51.875 and is expected to pay a dividend of $3.35 per share next year.

a.If 'Premier Goods' is selling for $29.45 per share, what is the expected return from this investment ? ( 1 mark)

b.Calculate your father's expected return on 'Sunshine Real Estates'. ( 1 mark)

c.Based on the results in part (a) & (b), can you say that one investment is superior than the other one ?If your father prefers to invest in stocks, what is your advice to him ?Explain your arguments. ( 4 marks)

d.Suppose your father also has some bonds, discuss why stocks are normally riskier than bonds.Is it good or bad ? ( 4 marks)