Question: T 2 / 17 Notukula Lid is deciding whether to pay out R90 000 in excess cash in the form of an extra dividend or

T 2 / 17 Notukula Lid 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 calculating: 1.1 Number of shares in issue (5) 1.2 Dividends per share (for the first alternative, i.e. pay the dividend) (3) 1.3 New share price (7) (5 ) 1.4 Earnings per share (5 ) 1.5 Price-earnings ratio 60 7'C Sunny w] x ] e LA search

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