Question 4

Zinger Co. pays annual dividend of RM 7.50 for each preferred shares and the investors required rate of return is 5%. Calculate the value of preferred shares (2 marks)

Municipal Enterprise pays an annual dividend of RM 6.50 for each preferred stock to investors required rate of return is 6%. Calculate the value of the preferred shares. (2 marks)

Roxy Enterprise pays an annual dividend of RM 12.50 for each preferred shares and the investor required rate of return is 8%. Calculate the value of the preferred stock. (2 marks)

Sudin want to buy preferred shares at Linguistic Company. After done little research, he finds out that the shares pays an annual dividend of RM 14 for each share and rate of return is 8%. Calculate the value of common share. (2 marks)

Nurul Co. paid RM 3.50 annual dividend at the end of last year for its common share. The dividend is expected to grow at 11% and the investors required rate of return is 16%. Calculate the price of the common share. (4 marks)

Datin Seri Corp. paid RM 11.50 annual dividend at the end of last year for its commons share. The dividend is expected to grow at 10% and the investors required rate of return is 13%. Calculate the price of the common share. (4 marks)

White Panther Corp. paid RM 111.50 annual dividend at the end of last year for its commons share. The dividend is expected to grow at 3% and the investors required rate of return is 6%. Calculate the price of the common share. (4 marks)

Differentiate and give examples what is the benefit whey you buy Common Shares or Preferred Shares. (5 marks)

[Total: 25 marks]