Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Al Maktoom Corporation was listed on the Dubai Financial Market (DFM) on 30 October 2018. The business operates in the Natural Resources sector and

  • The Al Maktoom Corporation was listed on the Dubai Financial Market (DFM) on 30 October 2018. The business operates in the Natural Resources sector and is involved in the discovery, development and processing of raw timber to be used in a variety of production industries in the MENA region.
  • The company currently has 100,000 shares of common stock outstanding in the market, with each share selling for $10.
  • At present, the Al Maktoom Corporation is not subject to the corporate income tax.
  • In parts (a) to (e) that follow you are required to calculate the following metrics for the Al Maktoom Corporation: its new share price AND the new number of company shares outstanding in the market.
  • Analyze the following events and write your answers in the space below.
  • Show all intermediate steps, formulas, calculations, along with the final answer.
  1. The firms management has decided to distribute $50,000 of extra cash to its ordinary shareholders in the form of cash dividends. (1 point)

NEW share price:

NEW number of shares outstanding:

  1. The firms management has decided to distribute $50,000 of extra cash to its ordinary shareholders in the form of a share repurchase. (1 point)

NEW share price:

NEW number of shares outstanding:

  1. The firms management has decided to issue a 20% stock dividend. (1 point)

NEW share price:

NEW number of shares outstanding:

  1. The firms management has decided to issue a 5-for-2 bonus share issue. (1 point)

NEW share price:

NEW number of shares outstanding:

  1. The firms management has decided to undertake a 3-for-1 stock split. (1 point)

NEW share price:

NEW number of shares outstanding:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Personal Finance Beginning Your Financial Journey

Authors: Lance Palmer, John E. Grable

2nd Edition

1119797063, 978-1119797067

More Books

Students also viewed these Finance questions