QUESTION 2 (25 MARKS) (a) Compute rate of return of investments in Kek Seng Berhad and Shima Berhad. (i) Kek Seng Berhad preferred stock that pays a $8 dividend every year and priced at $100 per share [4 marks] (ii) Shima Berhad common stock that just paid $2.32 dividend per share. The Shima's stock dividends are anticipated to maintain a 5.5 percent growth rate, forever and it is priced at $49.50 per share. [6 marks] (iii) Which one do you buy if your minimum required rate of return is 9%? [2 marks] (b) Shila Corporation just paid a dividend of $253 per share on its stock. The dividends are expected to grow at a constant rate of 5.4 percent per year, indefinitely (1) If investors require a 10 percent return on this stock, what is the current price? [6 marks] (ii) What will the price be in 15 years? [2 marks] (c) Which of the money market securities is the most liquid and considered risk free? Why? [5 marks]