QUESTION 6 (ASSIGNMENT QUESTION 2) Recent financial information relating to Cloje Co, a stock market listed company, is as follows. Sm 66.6 40.0 SIO MS M. profit after tax (earnings) dividends statement of financial position information non current assets current assets total assets Sm Sm 595 125 current liabilities equity ordinary shares ($1 nominal) 80 reserves 410 REPLAY MODE X/LOGIC X-1 HEX 10* BIN ex log COS tan COS tar M- 9 M+ LConjg INS DT CL OFF DEL 720 Pr K AC nCr Poll ra+bi Recl Re-Im % non current liabilities 6% bank loan 40 8% bonds ($100 nominal) 120 Re 70 490 DI Po Equity Dividad growth suit 160 to Ordera fo ar P 720 Financial analysts have forecast that the dividends of Cloje Co will grow in the future at a rate of 4% per year. This is slightly less than the forecast growth rate of the profit after tax (earnings) of the company, which is 5% per year. The finance director of Cloje Co thinks that, considering the risk associated with expected earnings growth, an earnings yield of 11% per year can be used for valuation purposes. EO