Dogtail Limited's statement of financial position shows ordinary shares of R50 million and retained earnings of R80 million. When calculating market value weights, how should retained earnings be treated?

Question

Accepted Answer

Ignore it as a separate item, because retained earnings are already reflected in the market value of the ordinary shares

Answer

Add R80 million to the market value of the shares as a separate component

Answer

Include it with the debt component

Answer

Include it as a separate component with a cost of zero

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Dogtail Limited's statement of financial position shows ordinary shares of R50 m...

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