Day: March 7, 2023

Alex ltd’s capital structure is shown below:

• 700 000 ordinary shares of £0.25 each – £175,000
• 8 % debenture – £160,000

During the year the company made profits before interest of £105k.

The directors wish to distribute as much of the profits as possible by way of dividend.

What is the dividend per share?

Select ONE answer:

1. £0.1317
2. £0.15
3. £0.5268
4. £0.60

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – £105,000 – (£160,000 * 0.08) then divided by 700,000 shares = 0.1317
2. Not correct
3. Not correct
4. Not correct

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