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# FIN622 - Corporate Finance GDB 2 closing date 18 jan 2016

FIN622 - Corporate Finance GDB 2 closing date 18 jan 2016

The board of directors of the Company ABC has declared a cash dividend of Rs.2 per share to be paid to the holders on February 3, 2016. The stock is trading at Rs.40 before this announcement. The ex-dividend date announced by the exchange is January 19, 2016.

You are required to discuss the following:

1. What would be the expected cum-dividend price per share and to which date the share will be traded cum-dividend?
2. What change would you expect in the price per share on the ex-dividend day?
3. Consider an investor buys the stock on ex-dividend day; will he be entitled to receive the dividend?

Special Note:

• Your answer should be to the point and based on logical facts.

Note:

For acquiring the relevant knowledge watch the course video lectures, consult recommended books, and study additional material available online or in any other mode.

Views: 1544

### Replies to This Discussion

=(40-2)/40*40

=38/1600

=0.02375 how 38 ali zeb

umar farooq ist question ka ans digit ma dena ha ya explaination ma dena ha???

is it right or wrong

1. What would be the expected cum-dividend price per share and to which date the share will be traded cum-dividend?
2. What change would you expect in the price per share on the ex-dividend day?
3. Consider an investor buys the stock on ex-dividend day; will he be entitled to receive the dividend?

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