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Accounting Paper 1, November 2024, question 3.5.4

Accounting P1 · Companies share capital and equity
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Extract from the records of Mabaso Traders Ltd at the end of the financial year: Sipho Dlamini’s shareholding: 58% of the issued shares Market value per share on the JSE: 1 150 cents Net asset value (NAV) per share: 720 cents Proposed buy-back price: R15 per share
3.5.44 marks
Refer to the information given. Mr Sipho Dlamini, the majority shareholder, plans to ask the board to buy back some of his shares in the next financial year at R15 per share. Explain why the other directors would probably vote against his proposal. Give TWO points, each supported by figures.

NSCBased on Nov 2024 · Paper 1 · Q3.5.4

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What examiners found

The repurchase price was not compared with the market price and the net asset value.

In our words. Source: Department of Basic Education, NSC 2024 Diagnostic Report, Part 1 (Book 1), Q3.5.

Updated