Answered: e and the share sells for R 30. Their…

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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Senten Ltd is deciding whether to pay out R60000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R 3.00 per share and the share sells for R 30. Their abbreviated balance sheet before paying out dividend is : R. Equity 240 000 Bank/cash 60000 Debt. 60000. Other assets 240 000 Total 300 000. 300 000 Evaluate each alternative (i.e pay the dividend or repurchase the shares) by calculating3.2.1 the number of shares in issue(5)
3.2.2 the dividends per share (for the first alternative i.e pay the dividends. (5)3.2.3 calculate3.2.3.1 the new share price3.2.3.2 the Earnings per share Equity

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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