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QUESTION FOUR [20]EFM101[JUNE2021] 4.1 Discuss the essential elements of a financial system. (10) 4.2 Siyavuma Ltd, expects a Return on Equity (ROE) of 12%; and

QUESTION FOUR [20]EFM101[JUNE2021]

4.1 Discuss the essential elements of a financial system. (10)

4.2 Siyavuma Ltd, expects a Return on Equity (ROE) of 12%; and has decided to maintain its plowback/retention ratio of 0.5. Siyavuma Ltd is further expecting earnings per share (EPS) of R3.6 and companys investors expect a return of 16% on the stock. Calculate the intrinsic value and the P/E ratio of Siyavuma Ltd. (10)

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