Explain the strategy adopted by the company

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AGL Energy Limited has declared a $0.33 cents per share dividend, payable in one month. At the same time the company has decided to capitalise reserves through a one-for-three bonus issue. The current share price at the close of business on the final cum-dividend date is $16.15.

a) Explain the strategy adopted by the company. In your answer, define the terms 'cum-dividend' and 'ex-dividend'.

Reference no: EM133002214

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