Tamas plc, which is ungeared, earned pre-tax accounting profits of £30 million in the financial year just ended.

Replacement investment will match last year’s depreciation of £2 million. Both are fully tax-allowable.

Corporation Tax is payable at 30 per cent. Tamas operates a 50 per cent dividend payout policy, and has previously issued 100 million shares, with par value of 25 pence each. Its shareholders require a return of 15 per cent p.a.

Tamas holds £15 million cash balances.

Required Determine the market price per ordinary share of Tamas, both cum-dividend and ex-dividend.

(N.B. Use the perpetuity formula to value Tamas’ shares.)