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Q2 Kavi, an equity analyst, is analysing the stock of PharmaBusiness Berhad, a healthcare company with a current stock price of RM80. The company just

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Q2 Kavi, an equity analyst, is analysing the stock of PharmaBusiness Berhad, a healthcare company with a current stock price of RM80. The company just paid an annual dividend of RM4, and it is expected that the dividend will grow at 4 percent in the coming two years and then increase by 5 percent per year thereafter. Kavi estimates that the required return of the stock is 13 percent. (1) ( a Estimate the stock price of PharmaBusiness using a two-stage dividend discount model. (10 marks) (ii) Explain if the stock calculated in Q3(a)(i) is overpriced, underpriced, or fairly priced

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