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b) Aming owns 400 shares of food company Nyet Food Berhad which he purchased during the recession in January 2017 for RM35 per share.
b) Aming owns 400 shares of food company Nyet Food Berhad which he purchased during the recession in January 2017 for RM35 per share. Nyet Food Berhad is regarded as a relatively safe company because it provides a basic product that consumer need in good and bad economic times. Aming read in the Malaysian Business Magazine that the company's board of director had voted to split the stock 2-for-1. In June 2020, just before the stock split, Nyet Food Berhad shares were trading for RM75.14. i. Explain the stock splits and the advantages of stock splits? ii. How many shares of Nyet Food Berhad will Aming own after the stock split? iii. Immediately after the split, compute the value of Nyet Food Berhad. Assignment of.... (8 marks) (2 Marks) (2 Marks) iv. Compare the total value of Aming's stock holdings before and after the split, given that the price of Nyet Food Berhad stock immediately after the split was RM37.50. What do you find? (4 Marks) vi. Does Aming experience a gain or loss on the stock as a result of the 2-for-1 split? (3 Marks)
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