A company conducts the following capital payout and raising policies. Assume that there are no taxes, no signalling effects and no transaction costs.

Which one of the following statements is NOT correct?

a. Cash dividend will not change the number of shares.

b. 1 for 4 bonus issue will increase the number of shares by 25% and decrease the share price by 20%.

c. 1 for 7 rights issue at a subscription price of $4 when the pre-announcement stock price was $7, will increase the number of shares by 14.29% and decrease the share price by 5.36%.

d. 20% stock buy-back will increase the number of shares by 20%.

e. 7 for 6 stock split will increase the number of shares by 16.67% and decrease the share price by 14.29%.