Question 2 2. (a) Explain why the return rate required by ordinary shareholders is different from the return rate required by bondholders. (12 marks) (b) Ordinary shares: 500,000 ordinary shares of nominal value 50 sen per share. The market value of the shares is RM1.58 per share. A dividend of 12 sen per share has just been paid and dividends are expected to grow by 5 per cent per year for the foreseeable future. Required: Calculate cost of equity using the Gordon growth model. (8 marks)