Efford plc has the following equity capital at the year end.(Click here to view the financial data.)In addition, the company has 400,000 £1 8% preference shares in issue.The board of directors wishes to eliminate the company's reserves. It has decided to make an immediate 1-for-2 bonus issue of ordinary shares. Following the issue,an annual dividend will be paid to shareholders.What will be the required:1. Transfer from revenue reserves to effect the bonus issue.£50,000 (Type an integer.)2. Dividend per ordinary share. (Expressed as £ per share)£ 0.10 per share (Round to two decimal places as needed.)Data table£Ordinary shares of £0.50 each200,000Share premium50,000General reserve80,00062,000Retained profits392.000

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Answered: Efford plc has the following equity…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 4P

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