CDL Ltd is deciding whether to pay out R100 000 in excess cash in the form of an extra dividend or implement a share repurchase. Net profit after tax is R155 000 and the share sells for R10. Their summarised statement of Financial Position prior to the dividend payment is as follows:

Evaluate each alternative (i.e. pay the dividend or repurchase the shares) by calculating the

2.1 Number of shares in issue. (3)

2.2 Dividends per shares (only for the first alternative, i.e. pay the dividend). (3)

2.3 New share price. (9)

2.4 Earnings per share. (5)

2.5 Price-earnings ratio. (5

\begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|l|}{ Assets } & \multicolumn{2}{l|}{ Equity and Liabilities } \\ \hline Tangible assets & 340000 & Equity & 500000 \\ \hline Inventories & 50000 & Debt & 100000 \\ \hline Receivables & 70000 & & \\ \hline Bank/cash & 14000 & & 600000 \\ \hline Total & 600000 & Total & \\ \hline \end{tabular}