A. What options are available to the holder of rights in a privileged subscription? [6 Marks] B. The preferred stock of ABCLtd has a par value of K100 and a K9 dividend rate. You require an 11% rate of return on this stock. What maximum price would you pay for it? [4 Marks] C. ZB Ltd latest annual dividend of K3.25 has just been paid and maintained its historic 7% annual rate of growth. You plan to purchase the stock today because you believe that the dividend growth rate will increase to 8% for the next three years before dropping to 5% indefinitely. I. How much should you be willing to pay for ZB stock if you require a 12% return? [10 Marks] II. What maximum price would you be willing to pay for ZB stock if you believed that the 8% dividend growth rate was infinite at the same required rate of 12% ? [5 Marks] [Total: 25 Marks]