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QUESTION 1 As a firm operating in a mature industry, Safee Industries is expected to maintain a constant dividend payout ratio and constant growth rate
QUESTION
As a firm operating in a mature industry, Safee Industries is expected to maintain a constant dividend
payout ratio and constant growth rate of earnings for the foreseeable future. Earnings were RM
per share in the recently completed fiscal year. The dividend payout ratio has been a constant in
recent years and is expected to remain so Safee's return on equity ROE is expected to remain at
in the future, and you require an return on the stock.
i
Using the constantgrowth model, calculate the currentvalue of Safee common stock.
Show your calculations.
ii Assuming that Safee's dividend will grow at a rate for the next two years, and then
returning in the third year to the historical growth rate and continuing to grow at the
historical rate for the foreseeable future, find the value of the stock today.
Marks
QUESTION
Recently, Shaz Berhad paid a dividend of RM per share to its shareholders. The dividend is
expected to grow at per year indefinitely. If the required rate of return on this stock is
i Calculate the value of the stock today
ii If the current market price is RM would you buy this stock?
QUESTION
Kuza Inc.s net profits after tax for the current financial year is RM million. Its payout ratio is
and its dividend grows at a constant rate of The company has million common stock
outstanding. If your required rate of return is using a dividend valuation model, compute the
value of Kuza Inc. stock.
QUESTION
Salmah is planning to purchase a stock of a company and she expects it to pay a dividend of RM
in year RM in year and RM in year She also expects to sell the stock for RM in three
years. If her required rate of return for purchasing the stock is how much would she willing to
pay for the stock?
QUESTION
Melor Corporation's stock is currently selling at RM per share. The company recently paid a
dividend of RM per share. The dividend is expected to maintain its growth rate of per year for
indefinite period. If an investor's required rate of return is should he buy this stock?
QUESTION
A year, percent coupon bond with a par value of RM will mature in another years. It is
currently selling at RM The issuer expects to call back the bond after years from the issued
date at RM Determine:
i Yield to maturity YTM
ii Yield to call YTCA monopsonist facing many suppliers of labor will employ: Multiple Choice fewer workers than a firm operating in a perfectly compe the same number of workers as a firm operating in a per more workers than a firm operating in a perfectly comp an indeterminate number of workers. Prev of
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