undefined

1. The accountant of COAT Bhd provides you with the following information

PPG Corp KP Corp

Current ROE 12% 8%

Current EPS RM5 RM1.50

Current DPS RM1.80 RM0.50

Current Market Price RM22 RM7

You are required to:

a) compute the dividend payout ratio of PPG and KP.(3m)

b) compute the intrinsic value of each stock. (assume the r = 14%) (6m)

c) choose the stock you will invest and give reasons.(2m)