Assignment task:
Meads Ltd is a successful clothing manufacturer. The company has an issued share capital of 100,000 shares. The current value is $1.50 per shares. Meads decides to sell one of its factories for $500,000. The directors do not like a minority shareholder called Jane and wish to get rid of her. The company announces that it has no present or future use of this money and they propose to return the excess to their shareholders. Consider the options that the Board below and discuss whether they will be successful:
(A) A share-buyback of 20% of all shares at $1.50 per share;
(B) A share-buyback of Jane's shares at $ 2 per share;
(C) A capital reduction to give all shareholders 50 cents per share?
(D) A capital reduction to give only Jane $1 per share and then to cancel her shares?