Question: QUESTION 1 A. PurpleTech Sdn Bhd is the main supplier of biogredable container for houseware in Malaysia. The firm is considering investing in two

QUESTION 1 A. PurpleTech Sdn Bhd is the main supplier of biogredable

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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