Ropeonfire is currently deciding on the level and form of its next dividend. It is considering three options:
(i) A cash dividend payment of 20p per share;
(ii) A 6 per cent scrip dividend;
(iii) A repurchase of 15 per cent of ordinary shares at the current market price.
Extracts from the company's financial statements are given below:

(a) If the current cum dividend share price is 420p, calculate the effect of the three options on the wealth of a shareholder owning 1,000 shares in Ropeonfire.
(b) Explain briefly how the company's decision will be influenced by the opportunity to invest £60m in a project with a positive net present value.

m Em Operating profit Taxation Distributable earnings Non-current assets Current assets 23.0 7.3 15.7 70 Trade receivables Inventory Cash 21 41 84 154 Total assets Equity finance Ordinary shares (50p) Reserves 20 103 123 Current liabilities Total liabilities 31 154