How will the proposed split-off affect the number

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On October 19, 2015, the following was reported in an article at StreetInsider.com: General Electric commenced an offer to exchange GE common stock for common stock of Synchrony Financial presently owned by GE. This exchange offer is in connection with the previously announced separation of Synchrony, the largest provider of private label credit cards in the United States, from GE. The exchange offer is expected to conclude the week of November 16, 2015. The exchange offer is designed to provide GE shareholders an opportunity to exchange their shares of GE common stock for shares of Synchrony common stock at a 7% discount, subject to an upper limit of 1.1308 shares of Synchrony common stock per share of GE common stock.

Problem 1: This transaction is a split-off. How do we know?

Problem 2: How will the proposed split-off affect the number of GE shares outstanding?

Problem 3: Given the details revealed in the news article, does the split-off appear to be pro-rata or non pro-rata?

Problem 4: What are the implications to GE if the split-off is non pro-rata?

Reference no: EM132951661

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