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QUESTION 1 RAYZIZO PIC issued 50 million ordinary shares with a market price of K3.5 each (exdiv). For the year ended 31 December 2020, the company earning per share and dividend payout ratio is expected to be K1.00 and 40% respectively. The company's dividend per share for the year ended 31 December 2018 was K0.2. The company equity beta is 1.5 . To raise K250 million RAYZIZO Plc has issued a bond that will be redeemed at its par value of K1,000 in ten year's time and pays annual interest of 15%. The current exinterest market price of the bond is K950. Ignore taxation. Additional market indicators are as follows: Required: a) Calculate the market value of RAYZIZO Plc using the following methods: (6 marks) (i) Price/earnings ratio (6 marks) (ii) Dividend growth b) Estimate the cost of the bond