Diana (Pvt.) Ltd. Is a local fund managing business that has been operating in the Pakistani industry for the past 15years. On May 9, 2020, the company hired you as a 'Personal Advisor' to Class - 1 (C1) portfolio investors who are the individuals with a minimum investment size of PKR100,000. Diana's C1 portfolio is of critical value to the business as it brings avenues of diversified investment with a flexible risk appetite for the fund manager as well as the investors. Being personal advisor, your assigned task on the first day of your job is to read out following pre-proposal investment queries, sent-in by the potential investors to the fund manager, and prepare formal response document:

a) Please put yourself in my shoes then understand and respond to the scenario that I state as "Assume you have keen interest in the Pak Elektron Limited's (PAEL) stocks and you come across three honest estimates about the intrinsic value of PAEL's share. Estimate 1 comes from a finance Professional (F-Pro), who has more than 30years of experience in analyzing numerous securities and his reputation on the Pakistan Stock Exchange (PSX) precedes him. Estimate 2 is offered by someone who has deep insight into the PAEL business and its stock trends; the Chief Financial Officer (CFO) of PAEL Company. Estimate 3, the last estimate, is given by your close friend, who also happens to be your neighbor". If there was a difference in the three estimates that you received from three different sources, which one would you tend to rely on? Why?

b) On 9th May 2020, Fauji Cement Company Ltd.'s (FCCL) share was trading at PKR16.81 per share. How would you define this value i.e. PKR 16.81? In general, average investors in Pakistani market expect the actual stock value of FCCL to be over, equal or under its intrinsic stock value?

c) In a state of economic recession, would you advise to raise capital through short-term borrowing or long-term borrowing? Explain.

d) At present, Attock Refinery Limited (ATRL) is trading at PKR 85.85 while Pakistan Refinery Limited's (PRL) market price per share is PKR 13.43. Most of the investors in PSX expect the two companies to report same cash flows (CFs) but their confidence in ATRL's CFs to be close to expected values is higher than that of PRL. Given these circumstances, what does your analysis say that which of the two stocks will report higher price?