16-5. (Calculating the ex-dividend stock price) The board of the Great Outdoor Tweed Com-pany has decided...
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16-5. (Calculating the ex-dividend stock price) The board of the Great Outdoor Tweed Com-pany has decided to offer a 1 for 4 bonus issue to their shareholders. The current share price is £8 per share. What do you expect the ex-bonus share prices to be? 16-6. (Calculating the stock dividend) Eastern Bank Limited is a retail bank based in India and has shown consistent good performance in recent years. The board of the bank has now raised concerns over the effects of the high share price of 6,400 per share. They feel that such a high share price is likely to make their shares less liquid and more unat-tractive for smaller investors. A range of 1,000 to 1,500, they argue, would be a good price range to make it sufficiently liquid and attractive. The CFO has suggested that they should make a bonus issue to achieve this objective. What should the bonus issue be to achieve the desired changes in the share price? 16-5. (Calculating the ex-dividend stock price) The board of the Great Outdoor Tweed Com-pany has decided to offer a 1 for 4 bonus issue to their shareholders. The current share price is £8 per share. What do you expect the ex-bonus share prices to be? 16-6. (Calculating the stock dividend) Eastern Bank Limited is a retail bank based in India and has shown consistent good performance in recent years. The board of the bank has now raised concerns over the effects of the high share price of 6,400 per share. They feel that such a high share price is likely to make their shares less liquid and more unat-tractive for smaller investors. A range of 1,000 to 1,500, they argue, would be a good price range to make it sufficiently liquid and attractive. The CFO has suggested that they should make a bonus issue to achieve this objective. What should the bonus issue be to achieve the desired changes in the share price?
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Answer rating: 100% (QA)
165 Solution A 1 for 4 bonus issue means that for every 4 shares owned by a shareholder they will receive an additional 1 share as a bonus This effectively increases the total number of outstanding sh... View the full answer
Related Book For
International Accounting
ISBN: 978-1260466539
5th edition
Authors: Timothy Doupnik, Mark Finn, Giorgio Gotti, Hector Perera
Posted Date:
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