Question: Please help me to answer this in details: Question 1: 20 marks The ordinary shares of Tech Berhad are currently trading at RM0.80. The last

Please help me to answer this in details:

Please help me to answer this in details: Question 1: 20 marks

Question 1: 20 marks The ordinary shares of Tech Berhad are currently trading at RM0.80. The last dividend per share was RM 0.15 and its dividends have been constant for 10 years. The company plans to finance a new investment project out of retained earnings and so for the next two years the dividend per share will fall to RM0.10. Benefits from the investment project will be gained from year three onwards and so Tech Berhad will pay a dividend of RM0.18 per share in that and subsequent years. (a) What would be the fair price for the shares of Tech Berhad? (10 marks) (b) Discuss whether a policy of paying out no dividends means that a company has no value. (5 marks) (c) Explain the bird in the hand arguement

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