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(a)Lestari Niaga Berhad common stock dividends have grown from RM2.70 to

By March 4, 2022No Comments

(a)Lestari Niaga Berhad common stock dividends have grown from RM2.70 toRM5.00 per share over the last 8 years.Determine the value of a common stockto an investor who requires a 16%rate of retum,assuming.that dividendscontinue growing for the foreseeable future at the same rate as over the past 8years.[4 marks](b)A 5 percent coupon bond of Jaguh Berhad with 10 years left to maturity is pricedto offer a 5.5 percent yield to maturity.You believe that in one year,the yield tomaturity will be 6 percent.What is the percentage change in price the bond willexperience in ringgit Malaysia if coupon is paid annually?[7 marks](c)The preferred stock of Kencana Holdings is selling for RM25 per share wherethe dividend rate is 4.5 percent on RM100 par value.The market required yieldon similar shares is 7.5 percent.、(Compute the value of stock to the investor?[3 marks](i)Compute the expected rate of return of the stock?[3 marks](iii)Assume that you have a required rate of return of 12 percent,calculate thevalue of the stock.Should you purchase the stock?[3 marks]



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