QUESTION 2 Pleasant Place Plc is planning to obtain a stock market listing by offering 30% ofits existing shares to the public. No new shares will be issued. Its most recent summarized results are as follows; Turnover GHC 120 m Earnings GHC 1,500m Number of shares in issue 6 million The company is highly geared and has a dividend policy of 50% pay-out rate. And the retention policy is expected to achieve 10% dividend growth each year. Summarized details of two listed companies in the same industry as MSC 2 ltd are as follows; 2 2 ICGC Ltd PCI Itd Gearing (Total debt/Equity) 45% 10% Equity Beta 1.60 1.10 The current Treasury bill yield is 22% per annum. The average market return is estimated to be 27%. The shares will be offered to the public at a price 20% lower than the estimated market valuation in order to increase the prospects of success for the public issue. a. What will be the issue price? 7 marks b. Describe any three (3) suitable situations that may lead to the valuation of shares 3 marks