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Question 5

The       following  are       financial  summary   of        Gemar  Bhd.

RM’000    2019       2020      2021       2022      2023    Average

Profits   After      Tax       (NCF)      RM’000    2,500.00  2,760.00  2,635.00  2,900.00  3,100.00

Retained  Profit     (NCF.K)   RM’000     1,550.00  1,775.00  1,600.00  1,800.00  1,900.00

Dividend  (NCF(1-K)) RM’000    950.00     985.00    1,035.00  1,100.00  1,200.00

Share     Capital    +         retentions

B/F       30,000.00  31,550.00 33,325.00  34,925.00 36,725.00

C/F       (=         BF        +          Retained  Profit)   31,550.00 33,325.00 34,925.00 36,725.00 38,625.00

Retention Rate       K         0.62       0.64      0.61      0.62      0.61      0.62

r         on         opening   capital    0.083     0.087     0.079     0.083     0.084     0.083

g         =          Kr        =          0.05.

Required  :                                                                                                    

Using     the        Gordon    Growth     model,    calculate the       value     of        the       company.

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