QUESTION ONE Pukri Ltd is deciding whether to pay out R90 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R2,40 per share and the share sells for R20. The abbreviated balance sheet before paying out the 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:

1.1 Calculating the number of shares in issue 1.2 The dividends per share (for the first alternative, i.e. pay the dividend)

1.3 Calculate: 1.3.1 The new share price 1.3.2 The EPS 1.3.3 The price-earnings ratio