M M Exports Ltd is a listed company on ASX It has 425,000 outstanding common shares, a P E ratio of 11 5 and $1,485,000 net income available for common shareholders this financial year The board of directors has just voted a 21 share split You current own 3,000 shares of this company M M Retailing Ltd is a subsidiary of M M Exports Ltd M M Retailing Ltd Is also an ASX listed company and going to pay an annual cash dividend of $3 5 per share and extra dividend of $0 75 per share Required If the market price of the M M Exports Ltd share 2 weeks after splitting bounced back to the level before splitting, calculate the increase in the total market capitalization of the firm and total value of your investment after the split (2 marks) ANSWER M M Exports Ltd just received a payment of USD 375,000 from a partner in United States If the direct quote of USD in Sydney is 0 67512, how much in AUD should the corporation record in their accounting book for this transaction (1 mark) ANSWER M M Exports Ltd has an extra cash of A$185,000 The AUD HKD exchange rate in Hong Kong is 5 82123 The HKD AUD rate in Sydney is 0 1765 Is there any arbitrage profit possible Set up an arbitrage scheme with the extra cash What is the potential gain in AUD dollar, disregarding bid ask spread (2 marks) ANSWER If the day after tomorrow is the record date of cash dividend payment by M M Retailing Ltd when is the ex dividend date for this share, given the standard process of settlement in ASX is T 2 Calculate the ex dividend price if the corporations closing price the day before the ex dividend date is $ 36 5, assuming the dividend flat tax rate is 25 (2 marks)

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M&M Exports Ltd. is a listed company on ASX. It has 425,000 outstanding common shares, a P/E ratio of 11.5 and $1,485,000 net income available

M&M Exports Ltd. is a listed company on ASX. It has 425,000 outstanding common shares, a P/E ratio of 11.5 and $1,485,000 net income available for common shareholders this financial year. The board of directors has just voted a 21 share split. You current own 3,000 shares of this company.

M&M Retailing Ltd. is a subsidiary of M&M Exports Ltd.

M&M Retailing Ltd. Is also an ASX listed company and going to pay an annual cash dividend of $3.5 per share and extra dividend of $0.75 per share.

Required:

If the market price of the M&M Exports Ltd share 2 weeks after splitting bounced back to the level before splitting, calculate the increase in the total market capitalization of the firm and total value of your investment after the split. (2 marks)

ANSWER:

M&M Exports Ltd. just received a payment of USD 375,000 from a partner in United States. If the direct quote of USD in Sydney is 0.67512, how much in AUD should the corporation record in their accounting book for this transaction? (1 mark)

ANSWER:

M&M Exports Ltd. has an extra cash of A$185,000. The AUD/ HKD exchange rate in Hong Kong is 5.82123. The HKD/AUD rate in Sydney is 0.1765. Is there any arbitrage profit possible? Set up an arbitrage scheme with the extra cash. What is the potential gain in AUD dollar, disregarding bid-ask spread? (2 marks)

ANSWER:

If the day after tomorrow is the record date of cash dividend payment by M&M Retailing Ltd. when is the ex-dividend date for this share, given the standard process of settlement in ASX is T+2? Calculate the ex-dividend price if the corporations closing price the day before the ex-dividend date is $ 36.5, assuming the dividend flat tax rate is 25%. (2 marks)