me Transcribed Image Text: An investor has estimated that next year’s sales for Pagoda Hotel will be RM100 million. Pagoda
Hotel has 5 million shares outstanding. It generates a net profit margin of about 10%, and has a
dividend pay-out ratio of 50%. Interest expense is RM10 million, taxes RM10 million, depreciation
RM15 million, and amortisation about RM5 million. All amounts are expected to remain the same
next year.
Required:
With the above information, calculate the following:
(a) Estimated net earnings for next year.
(b) Next year’s dividends per share.
(c) The expected price of the stock (assuming the P/E ratio is 24.5 times of earnings).
(d) The expected total return in percentage (latest stock price: RM40 per share).
(e) The expected price – to – cash – flow ratio for next year.