Question 1 (This question has two parts a) and b) (4+4 = 8 marks)

Part a) The following table shows dates related to dividend declaration procedure for Imaginary Inc. Your task is to organise and label the dates according dividend declaration procedure.

Dates of Dividend declaration procedure for Imaginary Inc.

9 April 2019

4March 2019

18 Feb 2019

6March 2019

Part b) The following table shows type of franking credit and amount of dividend for two companies. Your task is to calculate the amount of franking credit and price per share on ex-dividend date. Show your workings by writing down the formula where appropriate.

Name

HiTech Co.

HiInt Co.

Franking Credits

Fully Valued

No value

Current Share Price

$30

$25

Dividend per share announced

$1

$1.50

Tax rate

30%

30%

Franking Credit

?

?

Share Price on Ex-Dividend Date

?

?