# Finance and Value Creation

## Finance and Value Creation

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Finance and Value Creation

Problem One

Ex-Dividend share price

Ex-Dividend Share price

= Share price before Dividend – Dividend about to pay

= \$76 – ((6.5 * (1-0.12))

= \$70.28

Problem Two

• Five-to-three stock split

= previous stock price / the split ratio

= \$72/ (5/3)

= \$43.2

• 12% stock dividend

= Share price before Dividend – Dividend about to pay

= \$72 – (0.12 * 72)

= \$63.36

• 45% stock dividend

= \$72 – (0.45 * 72)

= \$39.6

• Five for seven reverse stock split

= \$72 / (5/7)

= \$100.8

Problem Three

Dividend for Year-1

D 1 = D + F x [(E x T) – D0]

Where,

D = DPS for year 0