Puan Rosmah, a retired lecturer plans to invest some money in buying common shares. She expects a return of 12% from all her investments. She was given the following information on the stocks of Setia Bhd.

 Present dividend RM1.00
 Growth rate of dividend 6% 

You are required to determine the price of Setia Bhd stock based on the above information: 

i) Based on the current information.
ii) If the growth rate is increase to 9%

Answer rating: 100% (QA)

To determine the price of Setia Bhd stock we can use the Gordon Growth Model also known ... View the full answer