APPLICATIONS OF CORPORATE EVENTS PART 1

UNIT 4 ASSIGNMENT

Use the information provided in the attached pdf DAWN Rights Offer Circular.

Complete the following assessment. You may use the formats, as per Chapter 21 of your prescribed text, as a guide when completing this assessment.

1. Construct a table, using the same components as table 21.1 (Chapter 21, page 261 of your prescribed text book), providing event conditions and information for the DAWN rights offer (10)

2. Construct a rights issue timeline, including dates, and briefly explain and highlight the

following periods: (5)

a. Rights Trading Period, b. Rights Subscription Period, and c. Expiry Period

3. Identify the different events in this multi-stage corporate action and indicate whether

they are mandatory, mandatory with options or voluntary events (5)

4. Calculate the trading price of the DAWN shares on the JSE on Friday, 10 March

2017 (5)

5. Identify the record date(s) and briefly explain the purpose of each (3)

6. Briefly explain the rules that will be used by DAWN in dealing with fractions for a

Rights Offer Share (3)

7. Using the information in the table on page 9,

a. Explain how the number of rights offer shares were determined for Coronation

and Ukhamba. b. Determine what percentage of their allocation Ukhamba has irrevocably committed to and what options they have for the remaining letters of allocation. (4)

8. Assuming that only 80% of the rights issue shares have been taken up and DAWNs shares are trading at R1.65 on 15 April 2017, calculate the ex-rights price. (5)