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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
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Question 89 Chapter 4 of +2-B
Earning Per Share, Dividend Per Share. Price Earning Ratio
89. The capital of Everest Co. Ltd. is as follows :
| ₹ | |
| 9% Preference share of 10 each | 3,00,000 |
| Equity shares of 10 each | 8,00,000 |
| 11,00,000 |
The Accountant has ascertained the following information :
| Profit after tax at 65% p.a. | 2,70,000 |
| Equity dividend paid 20% | 60,000 |
| Market price per equity share | 40 |
You are required to calculate the following
(i)Earning per share
(ii) Price Earning Ratio
| Earnings per Share | = | Net profit after Interest and Tax Preference Dividend |
| Number of Equity Shares | ||
| = | ||
| = | ₹ 2,43,000 | |
| ₹ 80,000 | ||
| = | ₹ 3.0375 |
| Price Earning Ratio | = | Market price per share |
| Earning per share | ||
| = | ||
| = | ₹ 40 | |
| ₹ 3.0375 | ||
| = | 13.16 times |
| Preference Dividend | = | 9% Preference share | ||
| = | 9 | X | ₹ 3,00,000 | |
| 100 | ||||
| = | ₹ 27,000 | |||
| Net profit preference Dividend | = | Profit after tax - Preference Dividend | ||
| = | ₹ 2,70,000 - ₹ 27,000 | |||
| = | ₹ 2,43,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 89 Chapter 4 of +2-B - USHA Publication 12 Class", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication Part 2 volume I.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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