S07Assg8

S07Assg8 - FIN 2200 CORPORATION FINANCE Term 2, 2006/2007...

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FIN 2200 – CORPORATION FINANCE Term 2, 2006/2007 Professors: A. Dua Assignment #8 NOTE: This assignment is NOT to be handed in! 1. Several weeks ago, the board of directors of Gordon Enterprises (GE) declared a dividend of $3.25 per share. Shareholders of record will receive their dividend at noon 43 days from today. The effective rate of return per year for GE is 25%. Suppose it is 11:59:59 a.m. and the stock goes ex-dividend at noon today. By how much would the stock price drop (all else equal) at the instant the stock goes ex-dividend? (Give answer to 6 decimal places.) ($3.165677) 2. Canadian Amalgamated Corp. (CAC), a company registered in Ontario, has 750 million shares outstanding. There are 100 million shares held as treasury shares (note: these cannot be voted). There are 11 seats on the board of directors and cumulative voting is used. a) How many shares are issued? (850 million) b) Suppose you own 5% of the outstanding shares and you wish to allocate an equal number of votes to each of 2 candidates. Assuming all 11 seats are up for election,
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S07Assg8 - FIN 2200 CORPORATION FINANCE Term 2, 2006/2007...

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