Taken from unit fm201 tutorial questions.solution please

2:20 Ii i 0 Ni 1'? .III .III 63%. TUTORIAL 4.pdf - Read-only e Q/OESOQ 5. Lovobalavu Limited pays a constant dividend of $0.60 cents per share. A fund manager is considering purchasing the shares as part of an investment portfolio. The fund manager requires a return of 15 per cent on the investment. Calculate the price that the funds manager would be willing to pay for the shares. 4 6The last dividend paid to shareholders by Damoda Centres was $0.10 per share. Assume that the board of directors of the company plans to maintain a constant dividend growth policy of 7.00 per cent. An investor, in evaluating an investment in the company. has detennined that she would require a 12 per cent rate of return from this type of investment. If the current mice of Vicinity shares in tte stock market is $4.00. should the investor purchase the shares? (Show your calculations.) CHAPTER 7 7. Identify and explain the different approaches to fundamental analysis. 8. Listed below are the close-of-business share prices for the Fortescue Metals over the last 10 trading days: $5.28 $5.29 $5.41 $5.54 $5.59 $5.45 $5.45 $5.39 $5.46 $5.31 a. Calculate a veday moving average and plot on a graph. b. Why might a technical analyst seek to plot moving averages? c. Recalculate the moving average using a simple weighted five-day moving average (show your calculations). What is the purpose and advantage of using this method? 8 a. Explain why a funds manager might employ the services of both a technical analyst and a fundamental analyst even though each may argue that the other's approach to share price forecasting is not reliable. \"I O <