A$)$ You just incorporated. Your new company, Hair Growth Products, will be listed on the second board of the Kuala Lumpur Stock Exchange. Your common stock is expected to sell for $$10\mathrm{.}00$ per share. Based on your prospectus, you think that investors will require a $15$ percent return on your stock. To partially satisfy that return, you plan on paying a dividend of $$1\mathrm{.}00$ per share at the end of the current year of operation. You will increase this dividend by $2$ percent every year. Based on this information, is your stock selling for a fair price?

$(4$ marks$)$

B$)$ Bandaraya Realty Group just paid a dividend of $$0\mathrm{.}20$ per share. Over the next two years, this dividend is expected to grow by $20$ percent per year. After two years, dividend growth is expected to level off at $10$ percent for some foreseeable future. If the required rate of return on Bandaraya stock is $12$ percent, what should be the price of Bandaraya stock today?

$(6$ marks$)$