Cathedral Construction Ltd is a property-o

问题：

Cathedral Construction Ltd is a property-owning company. The main asset of the company is a piece of land that it bought with the view of building a block of flats on it. The land was bought some years ago at a price of R50 000. The directors have recently had the site revalued and the current value is R350 000. It has been some years since the company has paid a dividend and the directors propose to use the revaluation as a basis for declaring a dividend in order to make the shares of the company more attractive, should they decide to issue further shares in the future.Required:Advise the directors as to the legality of a payment of dividends by a company in the above circumstances. (10 marks)