Reference no: EM132626136
Pukri Ltd is deciding whether to pay out R90 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R2,40 per share and the share sells for R20. The abbreviated balance sheet before paying out the dividend is:
Equity 240,000 Bank/cash 90,000
Debt 160,000
Other Assets 310,000 400,000 400,000
Evaluate each alternative (i.e: pay the dividend or repurchase the shares) by:
Question 1 Calculating the number of shares in issue
Question 2 The dividends per share (for the first alternative, i.e. pay the dividend)
Question 3 Calculate:
Question 3.1 The new share price
Question 3.2 The EPS
Question 3.3 The price-earnings ratio
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