Question 5 a. Abu Bakar, a retired teacher, plans to invest some money in ordinary stocks. If he expects a return of 10 percent from his investment. What will be the value of the stock based on the following conditions? i. Present dividend RM1.00, constant growth rate of dividend 5 percent. (4 marks) ii. Present dividend RM1.00, constant growth rate of dividend 8 percent. (4 marks) ill. Present dividend RM1.00, constant growth rate of dividend 5 percent, and he revised his required rate of return to 9 percent. (4 marks) If he requires a return of 12 percent and the current market value of the stock is RM36.00. Will he find this stock attractive? (4 marks) b. Johan Bhd is a high growth company. Its current dividend of RM2.00 per stock and the dividend is expected to grow at a rapid rate of 30 percent a year for the next 3 years. Thereafter, dividend growth will slow down to 7 percent a year for the indefinite future. If investors want a required rate of return of 20 percent, calculate the stock intrinsic value? (9 marks) iv. TOTAL 25 MARKS