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Delta Products Has Decided to Spin Off One of Its

question 33

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Delta Products has decided to spin off one of its subsidiaries,Gamma Technologies.Each Delta shareholder will receive 0.125 shares of Gamma for each share of Delta they own.Delta's price is $35.00 cum-dividend and immediately after the spin-off Gamma Technologies was trading for $24.00 per share.In a perfect capital market,what would Delta Product's ex-dividend share price be after this transaction?


Definitions:

Systematic Desensitization

A therapeutic technique used to reduce anxiety or fear responses by gradually exposing the individual to the feared object or situation while practicing relaxation exercises.

Deep Muscle Relaxation

A technique that involves tensing and then relaxing specific muscle groups to reduce stress and anxiety.

Speaker Anxiety

The nervousness or fear a person experiences before or during a public speaking event.

Trait Anxiety

A characteristic of an individual that denotes their tendency to perceive situations as threatening, leading to anxiety.

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