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3.2 Senten Ltd is deciding whether to pay out R60 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R3.00 per share and the share sells for R30. Their abbreviated balance sheet before paying out the dividend is: R R Equity 240 000 Bank/Cash 60 000 Debt 60 000 Other assets 240 000 300 000 300 000 Evaluate each alternative (i.e: pay the dividend or repurchase the shares) by calculating:

3.2 Senten Ltd is deciding whether to pay out R60 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R3.00 per share and the share sells for R30. Their abbreviated balance sheet before paying out the dividend is: R R Equity 240 000 Bank/Cash 60 000 Debt 60 000 Other assets 240 000 300 000 300 000 Evaluate each alternative (i.e: pay the dividend or repurchase the shares) by calculating:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3.2.1 The number of shares in issue. 3.2.2 The dividends per share (for the first alternative, i.e. pay the dividend). 3.2.3 Calculate: 3.2.3.1 The New share price 3.2.3.2 The Earnings per share 3.2.3.3 The Price-earnings ratio
Transcribed Image Text:3.2.1 The number of shares in issue. 3.2.2 The dividends per share (for the first alternative, i.e. pay the dividend). 3.2.3 Calculate: 3.2.3.1 The New share price 3.2.3.2 The Earnings per share 3.2.3.3 The Price-earnings ratio
3.2 Senten Ltd is deciding whether to pay out R60 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R3.00 per share and the share sells for R30. Their abbreviated balance sheet before paying out the dividend is: R R Equity 240 000 Bank/Cash 60 000 Debt 60 000 Other assets 240 000 300 000 300 000 Evaluate each alternative (i.e: pay the dividend or repurchase the shares) by calculating:
Transcribed Image Text:3.2 Senten Ltd is deciding whether to pay out R60 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R3.00 per share and the share sells for R30. Their abbreviated balance sheet before paying out the dividend is: R R Equity 240 000 Bank/Cash 60 000 Debt 60 000 Other assets 240 000 300 000 300 000 Evaluate each alternative (i.e: pay the dividend or repurchase the shares) by calculating:
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