100%(1)1 out of 1 people found this document helpful
This preview shows page 7 - 11 out of 34 pages.
major impact towards Petron where it would cause Petron to come to an end. It has been reportedthat oil would only last until 2052 whereas gas would only last until the year of 206612. This issue plays an important role to Petron as Petron is a major in oil and gas company.9 Lim, Ben Shane. 2017. Analysing Hengyuan’s discount to Petron. The Edge Markets. -hengyuans-discount-petron.10 Blakers, Andrew and Stocks, Matthew. n.d. Solar PV and wind are on track to replace all coal, oil and gas within two decades. The Conversation. Accessed May 1, 2018. -decades-94033.11 Sources of Greenhouse Gas Emissions. n.d. EPA. Accessed May 1, 2018. -emissions#main-content.5
3.2 Return on financial year 2017/2016Appendix C shows the share price of Petron Malaysia Refining & Marketing Bhd from the 1stof July 2016 to 30thof June 2017. On the 4thof July, the initial share price of Petron Malaysia is RM3.73 and the final share price of Petron Malaysia on 26thof June 2017 is RM7.28. The capital gain of Petron Malaysia is calculated below:Capital Gain = 0.931Capital Gain = 93.1%Petron Malaysia Refining & Marketing Bhd has capital gain of 93.1% as the share prices of the company increase from RM3.68 to RM7.28 in the financial year of July 2016 to June 2017.Appendix D shows the dividend that have been paid to the shareholders during 2017. The final dividend that Petron Malaysia has paid to the shareholders is RM0.22.The dividend yield for Petron Malaysia during the financial period is calculate below:Dividend Yield = RM0+RM0.22RM3.68Dividend Yield = 0.0597Dividend Yield = 5.97%12 The end of fossil fuels. n.d Ecotricity. Accessed May 1, 2018. -of-fossil-fuels.6
The total return for Petron Malaysia is calculated below:Total return = Dividend Yield + Capital GainsTotal return = 5.97% + 93.1%Total Return = 99.07%The Bursa Malaysia Mid 70 index (FBM70) is market capitalization of the middle company in Malaysia which consist of 70 different company. The final index value of the Bursa Malaysaia Mid 70 index is 15073.83 and the initial index value is 12946.6. This is shown in appendix E. The market return for Petron Malaysia is calculated below: Return Market = 15073.83−12946.612946.6Return Market = 0.1643Return Market = 16.43%The return market for Petron Malaysia is 16.43% and the total return of Petron Malaysia which has been calculated earlier is 99.07%. This show that Petron Malaysia is currently doing fine in the financial year of July 1 2016 until June 30 2017.7
4.0 Cost of Capital4.1 Cost of EquityThere are two types of method can be used while calculating cost of equity which are Capital Assets Pricing Model (CAPM) and Dividend Growth Model (DGM). We will be calculated both method to have more accurate outcome of the result.Capital Assets Pricing Model (CAPM)The formula of CAPM is:The equation of rf is risk-free rate of the company, rm is considered as expected return of rate of return which calculated at the previous question and B is the beta of the company assets.The rf is 3.95 which can be shown in appendix F13. For beta of Petron company, there are several