On January 1, 2020, Mr. Choi is notified that he has won $300,000 in the provincial lottery. This amount is immediately available to Mr. Choi and its not subject to any form of taxation.

Mr. Choi had no immediate need for these funds. However, he is retiring on January 1, 2021 and works like to have the funds available at that time for use in relocating to a warmer climate. Given this, he would like to invest these funds for the period ending December 31, 2021. He is considering the following alternatives:

Guaranteed investment certificate: The $300,000 can be invested in s guaranteed investment certificate that matured on December 31, 2020. The certificate pays interest at 4%.

Common stock: The $300,000 can be invested in shares of a Canadian public company. The shares are currently trading at $41 per share and pay an annual eligible dividend of $1.5 per share. Mr. Chois broker assured him that the shares will be trading at $42 per share by December 31, 2020.

Mr. Choi has sufficient employment income that he is in the 29% federal tax bracket and the 15% provincial tax bracket. The provincial dividend tax credit for eligible dividend is equal to 10% of the actual dividend.

Required: Write a brief memorandum providing investment advice to Mr. Choi.