QUESTION 2 (20 MARKS) The value of a financial investment is found by computing the value today of all cash flows the investment will generate over its life. Required a) b) Compare and contrast the difference between the cash flows of bonds versus the cash flows of stocks. (10 marks) Grant & Co.'s stock has just paid its annual dividend of $1.10 per share. Analysts believe that Grant will maintain its historic dividend growth rate of 3%. If the required return is 8%, calculate the expected price of the stock next year. Show (5 marks) calculations Grant & Co.'s, dividend of $1.10 per share is expected to double for the next four years, after which it will grow at a more modest pace of 1% per year. With a required return of 13%, calculate the current price of the stock calculations Show (5 marks)