Bliz Blue Berhad has issued 2 0 0 millions shares 5 years ago at RM 4 .
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Question:
Bliz Blue Berhad has issued millions shares years ago at RM per share. of its shareholders are the preferred stockholders. Currently, the firm market price for its common stock is RM per share and the preferred stock is RM per share. The firm beta currently is while the riskfree rate which is the MGS Malaysia Goverment securities rate is presently at and the market return on expected portfolio is The required rate of return for preferred stock is
The firm recently paid the dividend for its common stockholder at RM per share while for preffered stock holder is RM per share. The firm plan to change its current growth rate from for the next two years to in Year and Year The growth rate will shrink to in Year and thereafter.
The firm has invested in CIMB and Digi shares. Currently, CIMB market price is RM and its beta shows at and the market risk premium is Digi currently market value is RM with a beta of and the expected market return for the telco industry is CIMB is expected to pay dividend of RM per share with the growth rate of Digi has recently paid its dividend of RM per share with expected dividend growth rate of
Required:
a What is the value of Bliz Blue common stock and preferred stock? Evaluate both stocks.
marks
CLO:PLO:C
ANSWER: k; Po common stock RM; Po preferred stock RM
b What is the value of CIMB and Digi? Evaluate both stocks.
marks
CLO:PLO:C
ANSWER: CIMB PoRM; Digi PoRM
c What is the expected price for CIMB after years? What is the dividend for Digi in year and year
marks
CLO:PLO:C
ANSWER: CIMB PRM; Digi DRM; DRM
d What is beta and what is the market beta? Explain the beta for Bliz Blue, CIMB and Digi and its riskiness.
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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