问题详情

DarlgaCoispartlyfinancedby7%loannoteswhichareredeemableattheirnominalvalueof$1,000perloannoteineightyears’time.Alternatively,theloannotesareconvertibleaftersevenyearsinto110ordinarysharesofDarlgaCoperloannote.TheordinarysharesofDarlgaCoarecurrentlytradingat$6？50pershareonanexdividendbasis.Thecurrentcostofdebtoftheconvertibleloannotesis8%.
Required:
(a)Justifyinganyassumptionswhichyoumake,calculatethecurrentmarketvalueoftheloannotesofDarlgaCo,usingfuturesharepriceincreasesof:
(i)4%peryear;
(ii)6%peryear.(6marks)
(b)Discussthelimitationsofthedividendgrowthmodelasawayofvaluingtheordinarysharesofacompany.(4marks)


请帮忙给出正确答案和分析，谢谢！