Notukula Ltd is deciding whether to pay out R90 000 in excess cash in the...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Notukula 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 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)
1.4 Earnings per share (5)
1.5 Price-earnings ratio (5)
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.