A January 31 announcement to shareholders of Premier Financial, a California savings and loan company, stated that
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On March 16, the board approved a merger between Premier Financial and a large U.S. steel company. The agreement called for a cash payment of $33.60 on each outstanding United Financial share. The original offer (in early February) was $42 per share for the 5.8 million shares outstanding.
1. As a recipient of the letter of January 31, you were annoyed by the five-for-four stock split. Prepare a letter to the chairman indicating the reasons for your displeasure.
2. Prepare a response to the unhappy shareholder in requirement 1.
3. A shareholder of Premier Financial wrote to the chairman in early March: “I’m confused about the change in the agreed upon price per share. I owned 100 shares and thought I’d receive $4,200.
Now the price has dropped from $42.00 to $33.60.” Prepare a response to the shareholder.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
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