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IULI Questions 1 to 6 refer to the following scenario: When it started a few years ago, a firm issued shares at R2 a share,

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IULI Questions 1 to 6 refer to the following scenario: When it started a few years ago, a firm issued shares at R2 a share, and raised R600,000 in equity. These shares now trade at R6 a share on the open market. The debt-equity mix is currently 10% (10% debt, 90% equity). The firm has generated a net profit of R150,000 this year and, as a rule, pays out 50% of its profit as dividends to shareholders. How many shares are there in issue? Select one: a. 100,000 O b. 300,000 C. 600,000 What will the total amount of dividends be? Select one: O a. R15,000 O b. R75,000 o c. R100,000 O d. R300,000 o e. R150,000 What will the EPS be? Select one: a. R3.00 b. R0.75 c. R1.50 d. R0.25 e. R0.50 What will the DPS be? Select one: O a. R0.75 O, b. R0.50 oc. R0.25 O d. R3.00 Oe. R1.50 If the firm were to take on more debt, and double its debt-equity mix to 20%, with no equity changes, what would the EPS be? Select one: a. R1.50 b. R0.25 C. R3.00 d. R0.75 e. R0.50 If the firm were to take on more debt, and double its debt-equity mix to 20%, with no equity changes, what would the DPS be? Select one: O a. R0.50 O b. R3.00 O c. R1.50 d. R0.25 e. R0.75

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