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Please help me please please. I will upvote for you support you work . Please help me life saver pls.. QUESTION/ SOALAN 1. Common stock
Please help me please please. I will upvote for you support you work . Please help me life saver pls..
QUESTION/ SOALAN 1. Common stock is part of the shareholders' equity of a company. (a) Pelangi Bhd.'s dividend is expected to increase at a stable rate. Next year's dividend is expected to be RM1 per share and will increase by 5% each year. Calculate the current value of the stock if the required rate of return is 10%. (b) Calculate the price to book value, when the market price per share is RM6.60 and the book value per share is RM5.50. (c) An analyst has conducted some research on the consumer product sector and found that the prevailing price earnings ratio for next year will be 10. If you agree with the evaluation, and estimate that the earnings per share of Arora Bhd. for next year is going to be RM0.50, calculate the prospective price of Arora Bhd. (d) Explain the differences between par value and book value per share by providing an appropriate example. 2. Freddie is evaluating two portfolios which consist of four assets but with different proportions. He is interested in using beta to compare the risk of the portfolio and given below is the information on each of the portfolios: Portfolio Weights (%) Portfolio Weights (%) Asset Asset Beta Portfolio A Portfolio B 1 1.2 35 10 2 1.0 15 20 3 1.1 40 45 4 0.8 10 25 Total 100 100 Based on the above information, you are required to: (a) Calculate the beta for both portfolios. (b) Compare the risk of each portfolio to the market as well as to each other. Assume the market beta is 1.0 (4) (c) Determine which portfolio is riskier. Explain. (4) (d) Calculate the required return for each portfolio based on the capital asset pricing model (CAPM), assuming the risk-free rate is 3% and the market return is 10%
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