Page 194 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx
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Chapter 8
4.3 The impact of scrip dividends and share repurchase on financial ratios
Scrip dividends Share repurchase
No overall impact on shareholder Same impact on shareholder wealth
wealth – gearing is constant. as a cash dividend.
More shares in issue – EPS falls. Fewer shares in issue – EPS rises.
Share price falls. Share price stays constant.
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