Question: QUESTION 1 (20 MARKS) a) What is dividend? (3 marks) b) Why does the value of a share depend on dividends? (3 marks) c) UDA

QUESTION 1 (20 MARKS)

a) What is dividend? (3 marks)

b) Why does the value of a share depend on dividends? (3 marks)

c) UDA Properties Berhad just paid a dividend of RM2.53 per share on its stock. The dividends are expected to grow at a constant rate of 5.4 percent per year, indefinitely. If investors require 10 percent return on this stock,

i. What is the current price? (6 marks)

ii. What will be the price in year three (3)? (8 marks)

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