Suppose company CRIADERO S.A. has decided to distribute a dividend in shares (released offspring). Dividend will be such that for each share owned shareholder will also receive 3 equal shares. Just before announcement of dividend following information was available:- Capital of company consisted of 3,000 shares with a par value of $3,500 each. - Economic value of equity was $12,600,000.Largest shareholder is LIBRE S.A., which owns 40% of shares. IT IS REQUESTED:a. How many shares of CRIADERO S.A. are owned by LIBRE S.A.? b. Determine economic value of LIBRE S.A.'s investment in Criadero S.A. before dividend.c. How many new shares should CRIADERO S.A. issue?d. Determine amount of capital increase that CRIADERO S.A. will make to distribute dividend in shares. Show corresponding entry.e. How many shares will LIBRE S.A. receive for this dividend?f. After stock dividend, determine: i. Price of CRIADERO S.A. share. ii. Economic value of CRIADERO S.A.'s equity. iii. Value of CRIADERO S.A.'s capital. g. Determine economic value of LIBRE S.A.'s investment in CRIADERO S.A. after dividend.
Suppose company CRIADERO S.A. has decided to distribute a dividend in shares (released offspring). Dividend will be such that for each share owned shareholder will also receive 3 equal shares. Just before announcement of dividend following information was available:
- Capital of company consisted of 3,000 shares with a par value of $3,500 each.
- Economic value of equity was $12,600,000.
Largest shareholder is LIBRE S.A., which owns 40% of shares.
IT IS REQUESTED:
a. How many shares of CRIADERO S.A. are owned by LIBRE S.A.?
b. Determine economic value of LIBRE S.A.'s investment in Criadero S.A. before dividend.
c. How many new shares should CRIADERO S.A. issue?
d. Determine amount of capital increase that CRIADERO S.A. will make to distribute dividend in shares. Show corresponding entry.
e. How many shares will LIBRE S.A. receive for this dividend?
f. After stock dividend, determine:
i. Price of CRIADERO S.A. share.
ii. Economic value of CRIADERO S.A.'s equity.
iii. Value of CRIADERO S.A.'s capital.
g. Determine economic value of LIBRE S.A.'s investment in CRIADERO S.A. after dividend.
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