Determine the value of mscb ordinary share

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PRINCIPLE OF FINANCE

Based on the above information, you are required to: MicroSun Computer Berhad (MSCB) is one of the well-known computer manufacturers in town. With good expertise, it is expected that the latest model of MSCB computer will be accepted widely in the market. The management estimate that the earnings and dividends of MSCB to grow at an annual rate of 5 percent indefinitely. MSCB just paid dividend on the ordinary share amounting of RM1 per share.

a.Determine the value of MSCB's ordinary share to an investor who requires an 8 percent rate of return.

b.Determine the value of MSCB's preference share if it was issue at RM100 (3 percent). Investors required rate of return on preferred share is 6 percent.

Reference no: EM133000271

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