1. (a) What actions that shareholders can take to ensure that managements and shareholders interests are aligned? Discuss. (10M)

(b) Prima Corporations dividend per share next year is expected to be RM3.02 and the firm expects dividends to grow at a rate of 5% per year for the foreseeable future.

If you can earn 13% on similar-risk investments, what is the most you would be willing to pay per share? If you can earn only 10% on similar-risk investments, what is the most you would be willing to pay per share? Compare and contrast your findings, and explain the impact of changing risk on share value.

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