Fastspeed Couriers has experienced one of their toughest years yet. They are deciding whether to pay...

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Fastspeed Couriers has experienced one of their toughest years yet. They are deciding whether to pay out R80 000 in accumulated cash in the form of an extra dividend to shareholders or embark on a share repurchase campaign. Current profits are R3.40 per share and the share sells for R36. Their abbreviated balance sheet before paying out the dividend is as follows: Assets Bank/Cash Other assets Total 100 000 280 000 380 000 Total Calculating the EPS. Equity Debt Calculating the new share price. Equity and Liabilities Evaluate each alternative (i.e. pay the dividend or repurchase the shares) by: Calculating the number of shares in issue. Calculating the Price-Earnings ratio. 310 000 70 000 ! Calculating the dividends per shares( only for the first alternative, i.e. pay the dividend). 380 000 Fastspeed Couriers has experienced one of their toughest years yet. They are deciding whether to pay out R80 000 in accumulated cash in the form of an extra dividend to shareholders or embark on a share repurchase campaign. Current profits are R3.40 per share and the share sells for R36. Their abbreviated balance sheet before paying out the dividend is as follows: Assets Bank/Cash Other assets Total 100 000 280 000 380 000 Total Calculating the EPS. Equity Debt Calculating the new share price. Equity and Liabilities Evaluate each alternative (i.e. pay the dividend or repurchase the shares) by: Calculating the number of shares in issue. Calculating the Price-Earnings ratio. 310 000 70 000 ! Calculating the dividends per shares( only for the first alternative, i.e. pay the dividend). 380 000

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answer To evaluate each alternative paying the dividend or repurchasing shares for Fastspeed Courier... View the full answer