QUESTION 2

The followings are information about three different companies. If an investor is having a required return of 12%, find the intrinsic value of each firm by using the appropriate valuation method.

Darius

Holding

Elliot's

Grou

Freddie

Incorporation

Last dividend (per share)

RM1.85

RM1.50

RM2

Information on the next dividend

The dividend expected to remain the same (no growth)

Thedividend growby indefinitely

will

5%

Expected dividend

In:

Year 1: RM2.13

Year 2: RM2.45 Year 3: RM2.81 Year 4: RM3.24

Year 5: RM3.72 Year 5 and beyond: it will grow by 5%