(a) Ihsan Berhad had paid a dividend of RM2.75 per share last year. The dividend is expected to grow at constant rate of 10 percent each year and required rate of return on share is 14 percent. Compute the current price of common share.

(b) Karabum Cotton has preferred share outstanding which pays 3.5 percent dividend out of its RM100 par value at the end of each year. Calculate the current price of the preferred share if the required rate is 8 percent.

(c) Kia motor issued 7 years maturity period of bond that paid the interest semiannually.The face value of bond is RM1,000 with 12 percent coupon rate and 10 percent yield to maturity respectively. Calculate the market price of bond issued.

(d) Financial institutions attempt to mitigate the risk of lending to borrowers by performing a credit analysis on individuals and businesses applying for a new credit account or loan. This process is based on a review of five key factors that predict the probability of a borrower defaulting on his debt.

Explain the statement above.