1. What is optimum dividend policy? What are the reasons for preferring stock dividend in the real world?

2. MM Companys current stock price is Tk. 237 and its last dividend was Tk. 11.5 per share. The companys required rate of return is 12.5 %. Dividend payout ratio of this company is 21% and the return on equity or reinvestment rate is 9.34%.

i) Determine the true value/intrinsic value of this stock and take your investment decision.

ii) What will be the price of stock of this company after five years?