FACULTY OF BUSINESS AND ECONOMICS

UNIVERSITY OF MALAYA
SEMESTER 2 2021/2022
CIC3020 CASES IN FINANCE
GROUP ASSIGNMENT

Report 1: Petronas Case Study

GROUP 3

GROUP MEMBERS MATRIC NO.

GAN ZEN XUEN 17205020

NUR FATIN FATIHAH BINTI MUSTAZA 17203755

THASHAYANI A/P SIVAKUMAR 17206978

THINESH A/L KUMARAN 17203161

LECTURER’S NAME: DR ROZAIMAH ZAINUDIN

SUBMISSION DATE: 1ST APRIL 2022

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Table of Contents
Question 1 .............................................................................................................................................. 3
Discuss the impact of the dividend payment policy on the value of the firm. ....................................... 3
Question 2 .............................................................................................................................................. 7
Which policy of distributing free cash flow (FCF) is the best for the company? ..................................... 7
Question 3 ............................................................................................................................................ 10
Should Petronas Gas Berhad pay cash dividends, or is stock repurchase a better choice? Discuss. ..... 10
Question 4 ............................................................................................................................................ 14
How much should be distributed in the form of dividend versus stock repurchase? ........................... 14
Question 5 .......................................................................................................................................... 166
Discuss the behavior of dividend payment in relation to the share prices. ......................................... 16
References ............................................................................................................................................ 19
Appendix .............................................................................................................................................. 20
Appendix 1: Five Year Group Financial Highlights ............................................................................... 20
Appendix 2: Dividend Per Share (cent) from 2008 to 2011 .................................................................. 20
Appendix 3: Share Price from 2008 to 2011 ........................................................................................ 21
Appendix 4: Historical Crude Oil price................................................................................................. 21
Appendix 5: Return, Beta and Expected Return .................................................................................. 21
Appendix 6: Covariance of Market and Petronas Gas Berhad ............................................................. 22
Appendix 7: Dividend Per Share .......................................................................................................... 22

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Question 1
Discuss the impact of the dividend payment policy on the value of the firm.

Modigliani-Miller’s Dividend irrelevant theory suggests that dividend payment policy doesn't have

a significant effect on the company’s value by making two basic assumptions which are a perfect

capital market and rational investors. However, in reality, capital markets are imperfect thus the

M-M theory doesn’t apt for the current market.

Researchers argue that there’s an absolute relationship between dividend policy and firm value.

According to dividend signaling theory, information asymmetry between managers and

shareholders leads investors to believe that a manager's dividend declaration is a signal that

indicates the firm's future growth potential. As a result, researchers suggest that dividend policy

and firm value have a positive relationship, with an increase in dividend increasing firm value and

vice versa.

However, some other researchers claim that corporations that are growing or prosperous have

less incentive to pay higher dividends since they require more internal cash to support their capital

expenditures (CAPEX) and investment initiatives. As a result, for a growing company, an increase

in dividend payments may appear to be bad news, as investors may assume that the company is

cutting CAPEX and investing less in order to pay higher dividends. Hence the firm value will be

negatively affected. They further explained that a high dividend payout ratio does not necessarily

mean the company is performing well, as it could signal the company's inability to manage its

cash flow to improve its performance. As a result, this type of investor perception may have a

negative impact on the firm's value.

In the case of Petronas Gas Berhad, the company doesn’t have a specific dividend policy that

has been publicly announced. The dividend policy of the firm is based on the industry average

payout, after considering the current working capital and capital requirements of the company.

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Based on Appendix 1 and the graph below, we can see that Petronas Gas Berhad is

maintaining a stable dividend payout policy, with the dividend not fluctuating much from

year to year and a positive dividend payout trend.

Comparison between Dividends, Profit after tax

and Share Price
Dividend Profit after tax Share Price

50 50
45
42.2

10.35 9.8 9.9 11.56

1.092 0.928 0.94 1.439

2008 2009 2010 2011

Graph 1: Comparison between Dividends, Profit after tax and Share Price
Source: Petronas Gas Berhad Case Study

We'll look at the profit after tax, dividends, and share price to see how dividends affect Petronas

Gas Berhad's firm value. This is because profit after taxes is the cash flow that can be paid to

shareholders in the form of dividends or retained by the company for investment or capital

expenditure. The share price, on the other hand, is an indication that has an impact on the

enterprise value by influencing market capitalization.

The impact of dividends on Petronas Gas Berhad's firm value was determined using historical

financial data from 2009 to 2011. According to the graph, the dividend climbed from 42.2 cents to

45 cents per share from 2008 to 2009, when the profit after tax decreased from 1.092 billion to

0.928 billion. The decline in profit after tax was mostly due to the financial crisis of 2008, which

had an impact on the oil and gas sector as oil and gas prices continued to fall, resulting in a

prolonged period of low prices combined with an increase in operating expenses. Despite the

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year's slower growth and worse economic activity, Petronas Gas Berhad boosted its dividend per

share by around 7% from 2008 to 2009. This is because Petronas Gas Berhad, a government-

linked company, has found that its dividend payout has been well received by the government.

As a result, the firm aimed to maintain rather than lower the dividend payout during difficult times.

When dividends increased from 42.2 cents to 45 cents per share from 2008 to 2009, the share

price fell from RM10.35 to RM9.80 per share, lowering the enterprise value by lowering the market

capitalization. The correlation between dividends and share prices from 2008 to 2009 may appear

to be negative, but the financial crisis of 2008 had a significant influence on the relationship. The

main cause of the drop in share prices is the sustained low oil and gas prices, as well as the

demand for the products, which resulted in poor demand for energy stocks.

Looking at the data from 2009 to 2010, the dividend per share increased by nearly 11% from 45

cents to 50 cents as the profit after tax climbed from RM 0.928 billion to RM 0.940 billion. The

increase in profit after tax for Petronas Gas Berhad is mostly due to the government's new tax

incentive for the oil and gas industry to develop the country's oil and gas resources. As a result

of the growth in profit after tax, the company's available cash flow increases, enabling bigger

dividends to be paid. Unless there is a financial crisis, an increase in earnings will result in a

bigger dividend distribution.

Furthermore, the increase in dividends from 2009 to 2010 has had a positive impact on Petronas

Gas Berhad's share price, which has increased from RM9.80 per share to RM9.90 per share. This

relationship is consistent with the bird in the hand theory, which argues that risk-averse investors

prefer dividends over capital gains because dividends eliminate uncertainty, allowing them to

discount a company's future earnings at a lower rate, resulting in a higher stock price. An increase

in stock prices would lead to an increase in market capitalization, which would raise the enterprise

value. As a result, when Petronas Gas Berhad announced an increase in the dividend in 2010,

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investors would find it appealing, creating demand, and because of the competition among

investors, the share price would rise.

The data from 2010 to 2011 on the other hand, has revealed that despite an increase in profit

after tax from RM0.94 billion to RM1.439 billion, the dividend per share remained constant at 50

cents. The dividends have remained the same because Petronas Gas Berhad is a cyclical oil and

gas company whose business is determined by economic conditions. Even though the company

has never declared any specific dividend payment policy publicly, the dividend payment history

of the company is stable. Therefore, the dividend payment structure of the company is the reason

why the dividend remained the same in 2011.

Even though the dividend remained the same, the share price of the company increased from

RM9.90 to RM11.56 per share in 2011. This positive relationship between dividend and share

price is consistent with the dividend signaling theory which argues that the information asymmetry

between managers and shareholders leads investors to believe that a manager's dividend

declaration is a signal that indicates the firm's current performance and future potential growth.

As the company’s dividend remains higher for two consecutive years, it signals to the investors

that the company is performing well and creates demand for the stock. The demand for stock

subsequently increased the competition among the investors to buy the stock which resulted in

an increase in the share price and the enterprise value.

In conclusion, the distribution of dividend and firm value of Petronas Gas Berhad is positively

correlated, with an increase in dividend resulting in an increase in the firm value and vice versa.

This positive relationship is backed by the bird in the hand theory and dividend signaling theory.

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Question 2
Which policy of distributing free cash flow (FCF) is the best for the company?

Petronas can distribute their profit to the shareholders by paying out dividends or retaining their

earnings for reinvestment purposes and capital expenditures (CAPEX). A dividend policy is a

decision made by the Board of Directors based on their company’s financial performance to

distribute the profits via cash to their shareholders. Based on Petronas Gas Berhad’s historical

data from 2008 to 2011, the company is maintaining a stable dividend payout policy. In this stable

dividend policy, Petronas will distribute a certain minimum amount of dividends at a certain period

every year, but the rate is not fixed. The shareholders will experience the full volatility of company

earnings whereas if earnings turn up, the shareholders will get high dividends and vice versa.

Since Petronas is a cyclical oil and gas company, its business is determined by the economic

condition, in which when the economy is in expansion phase, the crude oil prices will increase,

and Petronas might enjoy a high profit and free cash flow. Thus, as a cyclical company, stable

dividend policy suits the best for the company since it reduces the uncertainty of the investors.

Moreover, Petronas is a government linked company (GLCs) which owned by the Malaysian

Government. When Petronas payout cash dividends, the majority amount of the dividends will be

distributed to the Malaysian government as they are major shareholders. When the company is

doing well with increasing revenue, Petronas paid high dividends and the Malaysian Government

will receive a large portion of the dividends. Besides, Petronas gives a subsidy on the regulated

and reasonable oil and gas prices for both domestic power and non-domestic power sectors. In

addition, they also give 15% of royalty and pay huge amount of taxes to the federal government.

This shown Petronas is one of the contributors on Malaysia’s source of income.

Furthermore, we can see from exhibit 2 and 3, the trend of dividend per share fluctuated upwards

and downwards, meaning that Petronas is not giving the shareholders a fixed dividend. From the

7
bar graph, we can see that the gap in the amount of dividends between years is small therefore

Petronas has a stable dividend from 2008 to 2011. We also can see in the profit after tax the trend

is going downwards from 2008 to 2009 and after that it increased again in 2009 till 2011. As stated

in question 1, If the profit after tax increases, Petronas would give a high dividend to the

shareholders. From the trends moving upwards from 2009 till 2011, we assume in 2012 Petronas

will give a high dividend more than 35% for the final dividend. This is because in 2012, Petronas

Gas Berhad was engaged in value-added projects like the Liquefied Natural Gas Regasification

Facilities project, which would help the firm to grow and expand. Thus, we expect that through

these value-added projects, Petronas Gas Berhad would make more profit. According to the

Aivazian et al. (2003), the relationship between profitability and dividend payout is positive

because when the company gets high profits, it will give a high return to its shareholders as

measured in the return on equity. Therefore, we believe that the increase in profit would be

resulted in higher dividend leads to higher payout of the company.

Based on the financial information given in Exhibit 4, the revenue rise of Petronas is expected to

grow continuously, meaning that it expected the demand for oil and gas production will be higher

in the future. Also, Petronas seems to boost their CAPEX but still gives quite a high dividend to

the shareholders. They will retain some earnings for reinvestment purposes and pay high

dividends in the future. Hence, many investors will attract to invest into Petronas shares because

the company is doing well and distributing high dividends.

Based on exhibit 1, Gas Malaysia Berhad mentioned they want to pay high dividend more than

75% to their shareholders and they will be a new competitor into the oil and gas market. Therefore,

this announcement will affect Petronas’s profitability in the future. Petronas worried about the

announcement so they also should pay high dividends to their shareholders to keep their trust in

Petronas company. Petronas will also make sure they will boost the sales revenue by expanding

and increasing their oil and gas production to meet the demand from the local and international

8
clients. This has shown that Petronas is able to compete in competitive advantage over its peers

and is able to give high dividends to their shareholders.

In conclusion, Petronas needs to distribute a part of its free cash flow through dividend instead of

allocating all free cash flow as retained earnings because as a company which operate in a

cyclical industry, maintaining a stable dividend payout act in the best interest of the company as

the investors would be confidence to the company financial strength even during the market

downturn. According to the financial statement of Petronas Gas Berhad disclosed in the case

study, its annual revenue is increasing and has great future growth aspects, hence we suggest

Petronas Gas Berhad pay a slightly higher dividend in 2012 compared to the previous year. We

forecast that in 2012 Petronas will pay 45% to 50% dividend to its shareholders as their net profits

moving upwards from year to year. Also, referring to the dividend signaling theory, when the

manager declares higher and stable dividends, the investors and shareholders would assume

that the company is doing well and attracts new investors who are seeking a regular cash stream.

Hence, we conclude that a stable dividend payout policy of distributing free cash flow is the best

for Petronas Gas Berhad.

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Question 3
Should Petronas Gas Berhad pay cash dividends, or is stock repurchase a better choice?
Discuss.

In the case study, Petronas Gas Berhad had excess free cash flow and it can be either distributed
in cash dividends or stock repurchase. However, a company considers stock repurchases only
when the stock is undervalued or at a fair price. If Petronas Gas Berhad share price is overvalued,
then there is no doubt that paying a cash dividend is a better choice. Therefore, we need to
calculate the intrinsic value of Petronas Gas Berhad. The method we used to calculate the intrinsic
value of Petronas Gas Berhad is Dividend Discount Model.

Step 1: Calculate the cost of equity (Using 5-year data based on data from 2006 to 2011)

The steps are calculated in this google sheet:

https://docs.google.com/spreadsheets/d/1-
JYxQfFFNbuj4MBJb_O9gbzqhJUiRF6Z1r4Muq4kzYk/edit?usp=sharing

Figure 1: Malaysian Government Securities Yield

Source: Bank Negara Malaysia

Component Calculation / Findings

Risk free rate of return (5 years yield) 3.96%

Beta 0.42
Market Return 11.22%
Cost of Equity
=
= 6.99%
*All the data used was extracted from S&P IQ Capital

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Step 2: Calculate the sustainable growth rate

Plowback ratio = 1 – payout ratio

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
=1– 𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

𝐸𝑃𝑆−𝐷𝑃𝑆
= 𝐸𝑃𝑆

72.7−50
=
72.7

= 0.3122

= 31.22%

ROE = Profit after tax / total equity

= 1439.1 million / 8515.2 million

= 16.90%

Sustainability growth rate = Plowback ratio x ROE

= 31.22% x 16.90%

= 5.28%

*Plowback ratio and ROE are calculated based on the data in case study Petronas Gas Berhad
financial statement for the financial year ended on 31 March 2011.

Step 3: Calculate the intrinsic value

Intrinsic value =

= (0.5x1.0528)/0.0699-0.0528

= RM30.78

*The preceding dividends (50cents) was used in calculation of intrinsic value as dividend for
PE2011 has yet to be approved.

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According to the calculation, we found out that the intrinsic value of Petronas Gas Berhad is

RM30.78 which is much higher than the current share price traded at RM13.37. This indicates

that Petronas Gas Berhad’s share price is currently undervalued and is worth stock repurchasing

by the management. By executing stock repurchase, reduction of the total number of shares

outstanding in the company led to an increase in earnings per share (EPS) of the company and

will drive the share price higher. However, stock repurchases need to consider other factors such

as disclosure of stock exchanges and approvals from regulatory authorities, which is a time-

consuming and complicated process. Besides, Petronas Gas Berhad did not execute stock

repurchase before and might lead to various unexpected situations or issues.

On the other hand, Petronas Gas Berhad which is a subsidiary of Petronas Group is a

government-linked companies (GLCs) and is listed on the main market of Bursa Malaysia. Hence,

it should act in the best interest of the government as it provides to a substantial source of income

to Malaysian government and contributes to the economy. Therefore, paying cash dividends is

the most direct way to contribute to the revenue of government.

In addition, Petronas Gas Berhad has paid dividends consistently over the years and this brought

confidence to the shareholders to keep investing in Petronas Gas Berhad and attracting new

investors who seek regular cash dividend investment opportunities. Furthermore, a consistent

dividend payout policy proves a company’s strength and its confidence in its future cash flow. This

would be a big incentive for the investors to invest in it and drive the stock price higher.

According to dividend signaling theory (James Poterba & Lawrence Summers), it suggests that

increment of dividend payout indicates the company positive expectation on future earnings

growth. It also indicates that the share price tends to move in the same direction as the dividend

payout policy. In the case study of Petronas Gas Berhad, Appendix 7 has disclosed that Petronas

Gas Berhad has had a steady increment of dividend payout over the years. Therefore, this has

turned into a steady increment in its share price performance over the years.

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 Graph 2: Share price of Petronas Gas Berhad from 31/32008 to 31/12/2011
Source: Exhibit 9 from case study Petronas Gas Berhad

In conclusion, our group would recommend Petronas Gas Berhad to retain its cash dividend
payout policy instead of stock repurchase.

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Question 4
How much should be distributed in the form of dividend versus stock repurchase?

Assume that RM 0.40 per share for dividend payout. According to the assumption, we will

calculate dividend and stock repurchase distributions in the table below. (Table 4.1 and Table

4.2)

Dividend Payout

Dec 2011 Dec 2011

(Cum- dividend) (Ex-date)
Excess Cash 791,520,000 0
(RM0.40 x No. of Share Outstanding)
(+) Other Asset (RM) 25,665,036,000 25,665,036,000

Market Value 26,456,556,000 25,665,036,000

No. of Share Outstanding 1,978,800,000 1,978,800,000

Share Price (RM) 13.37 12.96

Table 4.1 - Illustrate the dividend payout distribution

Table 4.1 demonstrates the excess cash will decrease due to the dividend payout; thus, this

reduces the market value of the company asset. Market value is a major component to calculate

the share price. It will lead to the share price dropping. Significantly, Petronas Gas Berhad will

not face losses due to the share price drop. Before the dividend was distributed, the share price

showed RM 13.37 which was RM 0.40 higher than after the dividend payout (RM 12.97). The

shareholders holding cash RM 0.40 per share which is RM 791,520,000 (RM 0.40 per share* no

of share outstanding) and distributed in terms of dividends payout policy. Hence, dividend payout

does not have a significant impact on the investor’s perspective.

14
 Share Repurchase

Dec 2011 Dec 2011

(Before Repurchase) (After
Repurchase)
Excess Cash 791,520,000 0
(RM0.40 x No. of Share
Outstanding)
(+) Other Asset (RM) 25,665,036,000 25,665,036,000

Market Value 26,456,556,000 25,665,036,000

No. of Share Outstanding 1,978,800,000 1,919,598,803

Share Price (RM) 13.37 13.37

Table 4.2 - Illustrate the share repurchase distribution

Table 4.2 demonstrates that excess cash tends to decrease from RM 791,520,000 to 0, after the

repurchase. The market value of the company assets will be reduced followed by the number of

shares outstanding will be reduced after the repurchase of shares. However, the share price will

remain the same, which is RM 13.37.

In Table 4.1 and Table 4.2, shows how much should be distributed in the form of dividends versus

shares repurchase. It clearly shows the difference between the dividend and share repurchase

method respectively and the influence of share price of dividend and share repurchase.

15
Question 5
Discuss the behavior of dividend payment in relation to the share prices.

The share price of a stock is basically determined by the law of supply and demand. Typically,

when there is a high demand for a stock with a limited number of shares available in the market,

the price of the stock tends to rise. This is because when a stock's demand exceeds its supply, it

causes investors to compete among themselves to buy the available stocks, driving up the stock

price. If there is less demand for a stock, on the other hand, the stock price will be dropped in

order to attract new investors. To put it another way, high demand raises the stock price, while

low demand lowers the stock price.

There are numerous conflicting arguments regarding the impact of dividends on the share price.

The Dividend Irrelevant Theory of Modigliani and Miller proposes that dividend payments have no

major impact on a company's value, based on two key assumptions: a perfect capital market and

rational investors. However, since capital markets are imperfect in reality, the M-M theory is

inapplicable to the current market. The dividends signaling theory and the bird in the hand theory,

on the other hand, suggest that there is a positive relationship between dividend policy and stock

price, with an increase in dividends leading to an increase in stock price.

Relationship between Dividend and Share

Price
60
50
40
30
20
10
0
2008 2009 2010 2011

Dividend Share Price

16
 Graph 2: Relationship between Dividend and Share Price
Source: Case Study Exhibits

The firm's historical financial data from 2009 to 2011 were utilized to determine the impact of

dividends on Petronas Gas Berhad's stock price. According to the graph, the share price didn't

seem to reflect much of a change in the dividend from 42.2 cents per share to 50 cents per share

between 2008 and 2010. This is mostly due to economic conditions in which all oil prices continue

to fall, resulting in prolonged periods of low oil prices, which have a negative impact on the firm's

operations and revenue. However, when the dividend payout stayed constant at 50 cents per

share from 2010 to 2011, the stock price grew from RM9.90 to RM11.56 per share. This increase

in share price illustrates that dividends and stock prices have a positive relationship.

The relationship between dividends and Petronas Gas Berhad's share price is consistent with the

dividend signaling theory, which suggests that an increase in dividend payment announcement

will increase the share price as the investors believe that dividends signal that the firm is

performing well. The financial performance of the company also supports this theory, as revenue,

profit after tax, and earnings per share increased dramatically from 3.221 million, 940.7 million,

47.6 cents to 3525 million, 1439.1 million, 72.7 cents when the dividend per share increased from

45 cents to 50 cents and remained stable at 50 cents.

Thus, the higher dividend influences the investors' perceptions of the company's performance,

resulting in increased demand for Petronas Gas Berhad stock. As a result of the increased

demand, there will be more competition among investors, resulting in an increase in the share

price.

The bird in the hand theory, which states that investors prefer dividends to capital gains, supports

the positive relationship between dividends and Petronas Gas Berhad's share price. Dividends

are preferred by risk-averse shareholders because they reduce the stock's uncertainty, causing

them to discount the firm's future earnings at a lower rate, resulting in a higher stock price.

17
Additionally, the increased dividend payments lessen the stock's risk, making it more desirable to

investors. As a result, demand for the stock would be created, and the share price would rise as

a result.

In conclusion, dividend payments have a favorable impact on the share price of Petronas Gas

Berhad, which is supported by the dividend signaling theory and the bird in the hand theory.

18
References

Ahmad Naqib. (2016). The Edge Financial Daily: Petronas cuts capex, opex by up to RM20b in
2016. Retrieved from https://www.theedgemarkets.com/article/petronas-cuts-capex-
opex-rm20b-2016

Dividend vs Share Buyback/Repurchase. Corporate Finance Institute.

Retrieved from https://www.theedgemarkets.com/article/petronas-cuts-capex-opex-
rm20b-2016

KANAKRIYAH, R. (2020). Dividend Policy and Companies’ Financial Performance. Journal of

Asian Finance, Economics and Business, 7, 531-541.

]Koswange, N. (2010). Malaysia govt rolls out tax incentives for oil and gas development.
Retrieved from https://www.reuters.com/article/malaysia-petronas-tax-
idUSL3E6MU06P20101130

Lumapow, L. S., & Tumiwa, R. A. F. (2017). The effect of dividend policy, firm size, and
productivity to the firm value. Research Journal of Finance and Accounting, 8(22), 20-24.
Retrieved from https://core.ac.uk/download/pdf/234632167.pdf

Petronas Gas Berhad. (2011). PGB Annual Report PE2011. Retrieved from
https://www.petronasgas.com/IR/Documents/Annual%20Reports/PGB%20Annual%20R
eport%20PE2011.pdf

Petronas-listed firms among GLCs in best position to raise dividends. (2020). The Star.
Retrieved from https://www.thestar.com.my/business/business-
news/2020/03/31/petronas-listed-firms-among-glcs-in-best-position-to-raise-dividends

Priya, P. V., & Mohanasundari, M. (2016). Dividend policy and its impact on firm value: A review
of theories and empirical evidence. Journal of Management Sciences and Technology,
3(3), 59-69. Retrieved from https://apeejay.edu/aitsm/journal/docs/issue-june-
2016/ajmst_030306.pdf

The power of dividends: How they can drive returns. (2022). Fidelity Singapore. Retrieved from
https://www.fidelity.com.sg/beginners/your-guide-to-stock-investing/the-power-of-
dividends-how-they-can-drive-
returns#:~:text=Why%20do%20companies%20pay%20dividends,to%20continue%20hol
ding%20the%20stocks

Trading Economics. (2022). Petronas Gas Berhad | PTG – Debt. Retrieved from
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Trading Economics. (2022). Crude Oil WTI. Retrieved from

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TheEdge. (2009). Petronas pays govt RM30b dividend. Retrieved from

https://www.theedgemarkets.com/article/petronas-pays-govt-rm30b-dividend

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Appendix

Appendix 1: Five Year Group Financial Highlights

Source: Petronas Gas Berhad Case Study

Appendix 2: Dividend Per Share (cent) from 2008 to 2011

Source: Petronas Gas Berhad Case Study

20
 Appendix 3: Share Price from 2008 to 2011
Source: Petronas Gas Berhad Case Study

Appendix 4: Historical Crude Oil price

Source: Petronas Annual Report

Market Petronas Gas Berhad

Return 11.22% 6.45%
Beta 0.42
Expected Return 6.99%

Appendix 5: Return, Beta and Expected Return

Source: Excel Calculation

21
 Market Petronas Gas Berhad
Market 0.0000837459
Petronas 0.0000349594 0.0001238567

Appendix 6: Covariance of Market and Petronas Gas Berhad

Source: Excel Calculation

Appendix 7: Dividend per share (cent)

Source: Petronas Gas Berhad Case Study

22