$.$ i$.$ Price per share $($using the dividend growth model$)$: To calculate the price per share using the dividend growth model, we need to know the current dividend per share, the expected growth rate of dividends, and the required overall return by equity shareholders.

From the information provided, the current dividend per share is R$2\mathrm{.}00($R$5,040,000/2,750,000$ shares$),$ the expected growth rate of dividends is $4\%,$ and the required overall return by equity shareholders is $10\%.$

Using the dividend growth model formula: P$0=($D$1/($r $-$ g$))$ where P$0$ is the current price per share, D$1$ is the next year's dividend per share, r is the required overall return by equity shareholders, and g is the expected growth rate of dividends, we can calculate the current price per share to be R$20\mathrm{.}00.$

Explanationfor step $1$

ii$.$ Earnings per share $($EPS$)$: To calculate earnings per share, we divide the profit after taxation by the number of shares outstanding.

From the information provided, the profit after taxation is R$15,120,000$ and the number of shares outstanding is $2,750,000.$

Therefore, earnings per share is R$5\mathrm{.}52($R$15,120,000/2,750,000$ shares$).$

iii. Dividend cover: To calculate the dividend cover, we divide the profit after taxation by the dividends paid.

From the information provided, the profit after taxation is R$15,120,000$ and the dividends paid are R$5,040,000.$

Therefore, the dividend cover is $3($R$15,120,000/$ R$5,040,000).$

Step $2$

iv$.$ Price$-$earnings ratio $($P$/$E ratio$)$: To calculate the P$/$E ratio, we divide the market price per share by the earnings per share.

From the information provided, the current price per share is R$20\mathrm{.}00$ and the earnings per share is R$5\mathrm{.}52.$

Therefore, the P$/$E ratio is $3\mathrm{.}62($R$20\mathrm{.}00/$ R$5\mathrm{.}52).$

v$.$ Gearing $($using market value for equity$)$: To calculate gearing, we divide the total liabilities by the total equity.

From the information provided, the company's only liabilities are its overdraft of R$120,000,000.$

The company's total equity can be calculated by taking the market value of the shares $($R$55,000,000)$ and adding retained profits $($R$10,080,000)$ and subtracting the overdraft $($R$120,000,000).$

Therefore, the total equity is R$-55,000,000+$ R$10,080,000-$ R$120,000,000=-$R$65,920,000.$

Therefore, the gearing is $181\mathrm{.}82\%($R$120,000,000/-$R$65,920,000).$

b$.$ SECTION A:

i$.$ EPS: The new project is expected to increase the annual growth rate of earnings and total dividends from $4\%$ to $9\%.$ This means that earnings per share will likely increase.

Explanationfor step $2$

ii$.$ The value of the company: The new project is expected to increase the annual growth rate of earnings and total dividends from $4\%$ to $9\%.$ This means that the value of the company will likely increase.

iii. The risk profile of the company: The new project is high$-$risk investment, which means that the risk profile of the company will likely increase.

SECTION B:

iv$.$ The percentage change, in comparison to the previous year, in earnings per share $($EPS$)$ of the company: To calculate this,

Answer

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