Question 1

Briefly describe the four types of secondary markets.

Question 2

Penang Hill Ltd is a fast growing company. The company expects to grow at a rate of 30 percent over the next 2 years and then slow down to a growth rate of 18 per cent for the following 3 years. If the last dividend paid by the company was $2.15 : Estimate the dividends for the next 5 years. Calculate the present value of these dividends if the required rate of return was 14 per cent.

Question 3

Bukit Kiara Ltd paid a dividend of $4.18 last year. The company does not expect to increase its dividend for the next several years. If the required rate of return is 18.5 per cent, what is the current share price?

Question 4

Mount Bukit Ltd declared a dividend of $2.15 yesterday. The company is expected to grow at a steady rate of 5 per cent for the next several years. If shares such as these require a rate of return of 15 per cent, what should be the market value of this share?

Question 5

Your required rate of return is 23 per cent. Gnangara Ltd has just paid a dividend of $3.12 and expects to grow at a constant rate of 5 per cent. What is the expected price of the share 3 years from now?

Question 6

Turkey Hill Ltd is a fast growing technology company. The company projects a rapid growth of 30 per cent for the next 2 years, then a growth rate of 17 per cent for the following 2 years. After that, the company expects a constant growth rate of 8 per cent. The company expects to pay its first dividend of $2.45 a year from now. If your required rate of return on such shares is 22 per cent, what is the current price of the share?