Polydamic Group Berhad is the largest environmental services facility in northern Malaysia. Polygamy has grown to be the environmental service provider with the largest fabrication facility and the largest workforce in northern Malaysia. It has a current dividend of RM1.50. The dividend is expected to grow at 6 percent annually. The company’s beta is 1.1. The risk-free interest rate is 4 percent and the market risk premium is 6.0 percent. Jacky Tan is interested to buy a stock of Polydamic. He seeks your assistance to: Show all your working steps. Calculate next year’s projected dividend of Polydamic’s stock. Compute Polydamic’s required rate of return for Jacky Tan. Calculate the value of Polydamic stock.
Polydamic Group Berhad is the largest environmental services facility in northern Malaysia. Polygamy has grown to be the environmental service provider with the largest fabrication facility and the largest workforce in northern Malaysia. It has a current dividend of RM1.50. The dividend is expected to grow at 6 percent annually. The company’s beta is 1.1. The risk-free interest rate is 4 percent and the market risk premium is 6.0 percent. Jacky Tan is interested to buy a stock of Polydamic. He seeks your assistance to: Show all your working steps. Calculate next year’s projected dividend of Polydamic’s stock. Compute Polydamic’s required rate of return for Jacky Tan. Calculate the value of Polydamic stock.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Polydamic Group Berhad is the largest environmental services facility in northern Malaysia. Polygamy has grown to be the environmental service provider with the largest fabrication facility and the largest workforce in northern Malaysia. It has a current dividend of RM1.50. The dividend is expected to grow at 6 percent annually. The company’s beta is 1.1. The risk-free interest rate is 4 percent and the market risk premium is 6.0 percent. Jacky Tan is interested to buy a stock of Polydamic. He seeks your assistance to:
Show all your working steps.
- Calculate next year’s projected dividend of Polydamic’s stock.
- Compute Polydamic’s required
rate of return for Jacky Tan. - Calculate the value of Polydamic stock.
- If Polydamic has a share of
preferred stock that the par value is RM10 per share, the preferreddividend rate is 8 percent and the required return is 10 percent, compute the price of the preferred stock for Jacky Tan.
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