Question 2 (15 points) Darius completed his business degree at Queen's University last winter. He works now at the Caisse de dpt et de placement du Qubec. His job requires him to manage a diversified portfolio of securities. Darius wants you to analyze two stocks for his personal portfolio. Here is the information you have: Heinekung Corp. will pay its first dividend at the end of the year. An independent consultant has forecasted that the company should pay the following dividends: Year 1 2 3 Dividend per share $0.65 $0.75 7% growth thereafter Carlsberging Corp. will pay a perpetual stream of $3.10 annual dividends per share at the end of every year. Shareholders require a 10% return for Heinekung Corp. and a 12% return for Carlsberging Corp. Your friend Darius knows that you are taking the course "Introduction to Finance" this term. To test your knowledge, he asks you a few questions that will help him to corroborate his analyses. a. What is the stock price of Heinekung Corp.? Please show your calculations. b. What is the stock price of Carlsberging Corp.? Please show your calculations. C. Based on your calculations in (a) and (b), Darius asks you to make a recommendation. The stock of Heinekung is trading at $22 and the stock of Carlberging at $26.50 on the stock market. Darius gives you four choices: i. Buy both Heinekung Corp. and Carlsberging Corp. ii. Buy Heinekung Corp. only iii. Buy Carlsberging Corp. only iv. Do not buy Heinekung Corp and Carlsberging Corp. Which recommendation do you make? Please explain