Question 5: The following are financial summaries 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.

Financial Management Required:

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