Question
a) Four years ago, Adibah paid RM14 per share for 200 shares in Takaful Bhd. The current share price has grown by 50% of the
a) Four years ago, Adibah paid RM14 per share for 200 shares in Takaful Bhd. The current share price has grown by 50% of the purchase price. So far, he has received 10 dividend payments, each amounting to RM0.05 per share. If Adibah decides to sell the shares at present, what will be the rate of return? (4 marks) b) The CEO of your company, Mdm Maryam is considering investing in a project with beta coefficient of 1.75. What would you recommend her to do if this investment has an 11.5 percent rate of return, the risk-free rate is 5.5 percent, and the rate of return on the market portfolio of assets is 8.5 percent? (Hint: Calculate using CAPM). As the CFO, advise Mdm Maryam on what does it mean by the answer that you have derived above?
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