X Ltd. has 10 lakhs equity shares outstanding at the beginning of the accounting year 2016. The
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Question:
(a) When the Board of Directors of the company has recommended Rs. 8 per share as dividend which is (i) declared, and (ii) not declared.
(b) How many new shares are to be issued by the company at the end of the accounting year when (i) the above dividends are distributed, and (ii) dividends are not distributed.
(c) Show that the market value of the shares of the company at the end of the accounting year will remain the same whether dividends are distributed or not declared.
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