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(a) Syarikat Ikhtiar Ikhlas Berhad was issuing 600,000 shares on this year. Thus, Ahmad interested to buy Syarikat Ikhtiar Ikhlas Berhad's shares with dividend RM2
(a) Syarikat Ikhtiar Ikhlas Berhad was issuing 600,000 shares on this year. Thus, Ahmad interested to buy Syarikat Ikhtiar Ikhlas Berhad's shares with dividend RM2 per share for the last several years. The dividends are expected to be the same amount indefinitely. Assume the appropriate discount rate for the stock is 8%. Calculate the Price (P) for Syarikat Ikhtiar Ikhlas Berhad shares using the zero-growth mode and give an appropriate explanation. (b) Aminah Berhad's is a manufacturing campany has a policy of constantly increasing its dividend over time. Its dividend for next year is expected to be RM2. Assuming a dividend growth rate g of 5% and required return of 10%. Assess the correct value (P) of the stock using Constant Growth Model and give an appropriate explanation
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