b) David Beckham is interested to be one of the MU Berhad shareholders. MU Berhad has provided three options as below for David Beckham to achieve his desire.

i. Option 1(Pilihan 1)

Common Share that pay dividends end of this year of RM2.00. The companys policy is to allow its dividend to grow at 5 percent for 3 years and then the rate of growth changes to 3 percent for the following year and on

ii. Option 2 (Pilihan 2)

The share is expected to provide an annual cash flow of dividends of RM5 indefinitely.

iii. Option 3 (Pilihan 3)

A common share with dividend paid last year of RM2.25. The companys policy allows its dividend to grow at 5 percent per year indefinitely

Which is the best option for David Beckham, if MU Berhad shares for all options above are selling for RM60?. Justify your answer. Assuming that the required rate of returns 8 percent

b) David Beckham is interested to be one of the MU Berhad shareholders. MU Berhad has provided three options as below for David Beckham to achieve his desire.

i. Option 1(Pilihan 1)

Common Share that pay dividends end of this year of RM2.00. The companys policy is to allow its dividend to grow at 5 percent for 3 years and then the rate of growth changes to 3 percent for the following year and on

ii. Option 2 (Pilihan 2)

The share is expected to provide an annual cash flow of dividends of RM5 indefinitely.

iii. Option 3 (Pilihan 3)

A common share with dividend paid last year of RM2.25. The companys policy allows its dividend to grow at 5 percent per year indefinitely

Which is the best option for David Beckham, if MU Berhad shares for all options above are selling for RM60?. Justify your answer. Assuming that the required rate of returns 8 percent