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Alfa PLC just paid a cash dividend of Rs. 2/= per share. Investors require a 16% return from an investment such as this. The dividend

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Alfa PLC just paid a cash dividend of Rs. 2/= per share. Investors require a 16% return from an investment such as this. The dividend is expected to grow at a steady rate of 8% per year. a) What is the current value of the share? b) Would you buy this share if it is selling at Rs.26.50/=? Justify your answer. Beta PLC's bond has a 10% coupon rate and a Rs. 1,000/= face value. Interest is paid annually and the bond has 20 years to maturity. If investors require a 12% yield, what is the bond value today? Using appropriate graph, explain the relationship between bond maturity and interest rate risk. Suppose an investor had purchased 1000 shares of ABC PLC on 1st January 2015 each at Rs. 20/=. The company paid a dividend of Rs. 2/= per share for the year 2015. These shares were sold on 31st December 2015 at Rs.24/= each. What was the return earned over year 2015

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