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QUESTION 4 4

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QUESTION 4

4.1 DDT Co is a company that has a shortage of cash on hand but still wants to pay dividends to their shareholders. As an advisor to the company, advise them on what options they have with respect to dividend payments given their current situation.

4.2 A listed company’s stock price closed at R90. The company’s profit for the financial year was R10 billion, while the number of shares outstanding was 2 billion. Using the information above, calculate the firm’s price/earnings (P/E) ratio.

4.3 Rainbow Concrete Company’s earnings available to ordinary shareholders are R5 000 000 and the company has 200 000 ordinary shares in issue at R30 per share. The firm plans to pay R3 per share in cash dividends. If the firm can repurchase the shares at R40 per share, how many shares can be purchased instead of proceeding with the cash dividend payment?

QUESTION 5

The importance of fighting bribery and corruption has been recognized as a top global priority. A distinction is generally made between facilitation payments and outright bribery and corruption.

5.1 Explain your understanding of “facilitation payments” and use an example to support your answer.

5.2 Outline the negative effects of bribery and corruption in business.

5.3 Discuss top-level commitment and due diligence as best practices to manage bribery and corruption.