Question 2 (a) Amara Ltd is an unquoted company and has paid a dividend of $250,000 this year. The current return to shareholders of companies in the same industry as Amara Ltd. is 12%. although it is expected that an additional risk premium of 2% will be applicable to Amara Ltd, because it's smaller and unquoted. Compute the total market value of the company if i. The current level of dividend is expected to continue into the foreseeable future. ii. The dividend is expected to grow at a rate of 4% per annum into the foreseeable future. Smarks] (b) The following data relates to the ordinary shares of 12BF Ltd. Current market price, 31 December 20X1 250GHp Dividend per share, 20X1 3GHP 10% p.a. Expected growth rate in dividends and earings Average market returns 8% Risk-free rate of return 5% Beta factor of Stilton equity shares 1.40 (i) What is the estimated cost of equity using the dividend growth model? (ii) What is the estimated cost of equity using the capital asset pricing model? [5marks) [Total marks 101