Delta Products Has Decided to Spin Off One of Its

question 33

Essay

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?

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Definitions:

Orthopneic Position

A sitting position to relieve respiratory difficulty in which the client leans over and is supported by an overbed table across the lap.

Chronic Obstructive Pulmonary Disease

A group of progressive lung diseases, including emphysema and chronic bronchitis, that restrict airflow and cause breathing difficulties.

Dyspnea

Difficult or laboured breathing.

Osteoporosis

Demineralization of the bone.