Question 1 Dube is a transport and logistics company based in Midrand, South Africa. They have...

  

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Question 1 Dube is a transport and logistics company based in Midrand, South Africa. They have declared an ordinary dividend of R120 000. Their profits for the current year are R1.95 per share, and the share sells for R18. The company is also considering offering a rights issue to its shareholders 1 share for every 4 shares held at an issue price of R15. All the shareholders had accepted the offer by the last day of the offer. Their summarised balance sheet prior to the dividend payment is as follows (all figures in ZAR) Equity Debt Tangible assets Inventories Receivables Bank/cash 800 000 200 000 600 000 5 000 275 000 120 000 Required: 1.1. Calculate the number of shares in issue (2) (2) 1.2. Calculate the dividends per share. 1.3. Calculate: the new share price, the EPS and the price-earnings ratio (3) 1.4. If the company proceeds to issue a rights issue, prepare the appropriate journals for the rights issue (3) 1.5 Disclose the rights issue in the Statement of Changes in Equity (5) Question 1 Dube is a transport and logistics company based in Midrand, South Africa. They have declared an ordinary dividend of R120 000. Their profits for the current year are R1.95 per share, and the share sells for R18. The company is also considering offering a rights issue to its shareholders 1 share for every 4 shares held at an issue price of R15. All the shareholders had accepted the offer by the last day of the offer. Their summarised balance sheet prior to the dividend payment is as follows (all figures in ZAR) Equity Debt Tangible assets Inventories Receivables Bank/cash 800 000 200 000 600 000 5 000 275 000 120 000 Required: 1.1. Calculate the number of shares in issue (2) (2) 1.2. Calculate the dividends per share. 1.3. Calculate: the new share price, the EPS and the price-earnings ratio (3) 1.4. If the company proceeds to issue a rights issue, prepare the appropriate journals for the rights issue (3) 1.5 Disclose the rights issue in the Statement of Changes in Equity (5)

Answer rating: 100% (QA)

Answer Number of shares in issue Equity Share price Number of sha... View the full answer