Question $5.$

Miranda Plc is a producer of luxury goods and is based in UK$.$ Miranda is an

international corporation and has its stores located in more than $130$ airports around

the world. The company paid a dividend of $33$ p per share $6$ years ago to its ordinary

shareholders. The current dividend is $56$ p per share. The current share price is $4\mathrm{.}5$

ex div.

Required:

a$)$ Calculate the rate of growth in dividends of Miranda

$(5$ Marks$)$

b$)$ Calculate the cost of equity

$(10$ Marks$)$

c$)$ Discuss the traditional view of Capital Structure

$(10$ Marks$)$

$($Total $25$ Marks$)$