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:

Lipoproteins

Molecules made of fat and protein that transport lipids (fats) in the blood.

Cholesterol

A waxy, fat-like substance found in all cells of the body, necessary for making hormones, vitamin D, and substances that help digest foods.

LDL

Low-Density Lipoprotein, often referred to as "bad" cholesterol, which can lead to plaque buildup in arteries, increasing the risk of heart disease.

Peptidases

Enzymes that break down peptides into their component amino acids by cleaving the peptide bonds between them.