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:

Activity-based Costing

A costing methodology that assigns costs to products or services based on the activities that go into making them, aiming to provide more accurate product costs.

Service Quality

The evaluation of how well a delivered service matches the customer's expectations, often a key factor in customer satisfaction and loyalty.

Factory Overhead

All manufacturing costs that are not directly associated with specific product units, including maintenance, utilities, and equipment depreciation.

Small Table Lamps

Portable lighting devices designed for placement on tables, providing localized light; often used for decoration or task lighting.