You are working for an imports-exports company. In the current financial year, your company has a net income of $851,000 and plans to use a part of it as retained earnings for a new project which will cost $500,000 next year. The company's stock is currently listed and actively traded on ASX. Required:
a) Calculate the amount of net income available for the company to pay dividends to current shareholders if it maintains a capital structure of 46% in debt funding and 54% in equity funding, assuming residual dividend theory applies.
b) Your company is going to pay an annual dividend of $5 per share and extra dividend of $2 per share in 4 weeks. The standard process of settlement in ASX is T+2. If tomorrow is the ex-dividend date, when is the record date for dividend payment? calculate the ex-dividend price if today's market price is $43.5, given the dividend tax rate is 13%.
c) Your company needs to make a payment of AUD 245,000 to a partner in Tokyo. If the direct quote of Japanese Yen in Sydney is 0.004782, how much Japanese Yen the partner in Tokyo will receive?
d) Your company has an extra cash of A$216 000. The AUD/USA exchange rate in New York is 0.77923. The USD/AUD rate in Sydney is 1.29135. Is there any arbitrage profit possible? Set up an arbitrage scheme with the extra cash, disregarding bid-ask spread. What is the potential gain in AUD dollar?