Find out the number of new shares

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Question - X ltd had 25000 equity shares of shs.100each outstanding on 1st November, the shares were issued at per in the market, the company removed constraints in the dividend policy,

The company became ready to pay dividends of shs.15 per share for the current calendar year. The capitalization rate is 15%. Using MM approach assuming that no taxes.

REQUIRED - Calculate the price of the shares at the end of the year.

When dividend is not declared.

When dividend is declared.

Find out the number of new shares that the company issues to meet its investment needs of shs.1,500,000, assuming the net income of shs.750000 and assuming that dividend is paid.

Reference no: EM132753333

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