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Calculating the number of shares in issue

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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

Reference no: EM132626136

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