4. Use the quotes from the article The good, the bad and the ugly on the JSE that was published www.moneyweb.co.za on 21 August 2019 to answer the questions that follow: Figures suggest that investors are happy to buy MTN at the current R104 per share on a PE of a high 34 times, which translates to a low forward PE of 14 times a year

4.1.1. Differentiate between PE and forward PE. (4)

4.1.2. Explain why a PE ratio of 34 for MTN can translate into a forward PE of 14 for MTN (3)

4.2. These are valuation levels we last saw in the financial crisis. This includes companies like AECI and Reunert. The former is trading on a price-to-earnings (PE) multiple of under nine times, and a dividend yield of 5.5%, while the latter is offering a PE of just over 10 and a dividend yield of more than 7%.

4.2.1. Define DY and explain how it can be used in investment decisions (4)

4.2.2. Define PE and explain how it can be used in investment decisions (4)

4.2.3. Explain the factors you will need to take into account to determine if a DY of 7% represent good value or not? (3)