2 / 8 100°. (a) State TWO (2) disadvantages of issuing equity rather than issuing debt. (2 marks) (b) Cadell Motors just

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2 8 100 A State Two 2 Disadvantages Of Issuing Equity Rather Than Issuing Debt 2 Marks B Cadell Motors Just 1 (91.34 KiB) Viewed 33 times

2 / 8 100°. (a) State TWO (2) disadvantages of issuing equity rather than issuing debt. (2 marks) (b) Cadell Motors just paid an annual dividend of RM1.80 per share on its common stock. The required return on the common stock is 12 percent. Calculate the value of the common stock under each of the following assumptions about the dividend: i. Dividends are expected to grow at an annual rate of 0 percent to infinity. (3 marks) ii. Dividends are expected to grow at constant annual rate of 5 percent to infinity. (5 marks) iii. Dividends are expected to grow as follows: Year Growth (percentage) 5 5 First Second Third Fourth to infinity 5 4 (8 marks) (c) Explain the following: i. Authorised share capital. (1 marks)