How calculating the number of shares in issue

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Pukri Limited is deciding whether to pay out R90 000 in excess cash in the form of an extra dividend or a share purchase. Current profits are R2,40 per share and the share sells for R20.

The abbreviated balance sheet before paying out 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:

3.1 The new share price

3.2 The EPS

3.3 The price-earnings ratio

Reference no: EM132641894

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