Notukula Ltd is deciding whether to pay out R90 000 in excess cash in the form of an extra dividend or a share repurchase. Current profits are R2,40 per share and the share sells for R20. The abbreviated balance sheet before paying out the dividend is:

Equity 240 000 Bank/cash 90 000

Debt 160 000 Other Assets 310 000

400 000 400 000

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

1.1 Number of shares in issue (5)

1.2 Dividends per share (for the first alternative, i.e. pay the dividend) (3)

1.3 New share price (7)

1.4 Earnings per share (5)

1.5 Price-earnings ratio (5)