QUESTION 1 A. PurpleTech Sdn Bhd is the main supplier of biogredable container for houseware in...
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QUESTION 1 A. PurpleTech Sdn Bhd is the main supplier of biogredable container for houseware in Malaysia. The firm is considering investing in two (2) securities that are trading in the stock exchange, which are Suntech Bhd and Moontech Bhd. The current market price of Suntech Bhd and Moontech Bhd shares are RM8.50 per share and RM6.50 per share, respectively. Below are the relevant financial information regarding the above firms for the current year: Dividend payout ratio Earnings per share Beta Growth rate per year Suntech Bhd 25% RM1.50 2 10.2% Moontech Bhd 20% RM1.25 2 9.57% The risk-free rate and the expected return on the market are 4% and 10% respectively. Required: Advise PurpleTech Sdn Bhd on which stocks it should consider for investment. (7 marks) QUESTION 1 A. PurpleTech Sdn Bhd is the main supplier of biogredable container for houseware in Malaysia. The firm is considering investing in two (2) securities that are trading in the stock exchange, which are Suntech Bhd and Moontech Bhd. The current market price of Suntech Bhd and Moontech Bhd shares are RM8.50 per share and RM6.50 per share, respectively. Below are the relevant financial information regarding the above firms for the current year: Dividend payout ratio Earnings per share Beta Growth rate per year Suntech Bhd 25% RM1.50 2 10.2% Moontech Bhd 20% RM1.25 2 9.57% The risk-free rate and the expected return on the market are 4% and 10% respectively. Required: Advise PurpleTech Sdn Bhd on which stocks it should consider for investment. (7 marks)
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SOLUTION CAPM RfRmRfB EPS1 EPSO1g DPS1 EPS1 DIVIDEND PAYOUT RATIO IVO D1Reg PAR... View the full answer
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
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