A company is under pressure from influential shareholders to change its dividend policy. The company has always followed the residual dividend policy, but the influential shareholders feel that the company needs to change to a stable pay-out ratio policy. The company just reported earnings of R232m for the year ended 31 March 2024. The company is considering the following investment opportunities for the upcoming financial year:

Investment opportunity	Cost	Internal Rate of Return
A	$72m	14.28%
B	$62m	13.03%
C	$110m	15.67%
D	$96m	16.01%
E	$48m	13.79%

The company's cost of capital is 13.5% and its target capital structure is represented by a debt-to-assets ratio of 40%. The company has 28m ordinary shares outstanding. Assuming that the company remained with the residual dividend policy for now, how much would shareholders receive per each share for the financial year ended 31 March 2024?

Answer rating: 100% (QA)

Answer To solve this problem we need to calculate the residual dividend per share for the financial ... View the full answer