KLC Ltd, a tree relocation company, follows a stable plus special dividend policy. The company recently (2021) had earnings available to common shareholders of R500m on sales of R2b and has 250m shares outstanding. The company maintains a stable payout ratio of 5% and issues special dividends whenever its net profit margin exceeds 10%. Special dividends amount to all profits exceeding 50% of the amount after the stable dividend had been deducted.
Determine the total dividend that KLC Ltd will pay per share in 2021 and choose the nearest option below.
Solution
