QUESTION 1 (26 MARKS) Berjaya Kenanga Investment Berhad has 25 million shares of 50 cents par value. With the same number of shares outstanding, last year's earnings per share was RM1.30. Last year net profit after tax was RM2 million. Due to their rapid expansion, net profit margin expected to increase by 5%. Its asset turnover ratio was 4 times. Berjaya increases its assets by 25% in this year and it expects sales to increase by 3% in this year from RM10 million in last year. The firm decides its retention rate for this year is is 45% and current market price is RM5 per share. Total amount dividend paid for last year is RM2.5 million. The firm's growth rate of dividend for the first two years is 20% and it reduced by 5% in year 3 and reduced by 10% in year 4 and thereafter. Its beta is 1.1, the expected market return of portfolio is 12%, the Treasury bill rate of return is 3%. Required: a. b. Assess last year and this year of its return on assets (ROA). Justify with calculation. (6 marks) (CLO2:PLO2:C6) Calculate both years of its EPS and the dividend per share (DPS) of the firm. Is the firm improved of its EPS and retention rate in this year? C. (8 marks) (CLO2:PLO2:C6) From (b), the changes of its EPS and DPS are benefits to the firm and its shareholders? (4 marks) (CLO2:PLO2:C6) d. Calculate the intrinsic value of the stock. Use the DPS from (b) for the DO. e. Evaluate Berjaya stock and is it worth to invest in this stock? (5 marks) (CLO2:PLO2:C6) (3 marks) (CLO2:PLO2:C6)