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SECTION B Choose the best answer. 1. Matrix Bhd is a young startup company. It plans no dividends payment on the stock for the next 8 years because the company needs to use the earnings to fuel growth. It plans to pay a RM8 per share dividend in 9 years time and will increase the dividend by 3% per year thereafter. What is the current share price if the required return on this stock is 8%. a. RM80.03 b. RM75.66 C. RM86.45 . RM70.06 (3 marks) 2. Sunshine Bhd has been experiencing a 6% per year decline in its dividend growth rate for the past 2 years and this decline is expected to continue. It currently pays a dividend of RMO.30 per share. If the shareholders' required rate of return is 15%, the intrinsic value of the company's stock is a. RM3.53 b. RM1.34 C. RM1.51 d. RM3.13 (3 marks) 3. Fantech Bhd's cost of capital is 10%. The company's current dividend per share is RMO.25 and have been growing at 3% per year. Recently, a new method of production was developed and this is expected to increase the company's growth rate to 6% for the foreseeable future. Calculate the expected stock price after the new production method is announced to the public. a. RM6.63 b. RM3.68 C. RM3.80 . RM1.65 (3 marks) 4. Dahlia Bhd has a current P/E ratio of 12 and its current EPS is RM1.20, It has increased its EPS by 5% annually in the past and this rate is likely to continue for some time. If the P/E ratio is expected to increase to 15 in five years, what is the expected stock price in year 5. RM20.07 b. RM29.70 MAFG53/TEST 1/JUNE 2022 C. RM22.97 d. RM27.29 (3 marks) 5. The annual dividends of Luna Bhd stock for the next four years are expected to be RM1.00, RM1,40, RM1.60 and RM2.00. Additionally, the stock price is expected to be RM12 in four years. The market interest rate is currently10%. Determine the value of this stock today. a. RM12.84 b. RM7.00 C. RM11.47 d. RM8.20