Question 89 Chapter 4 of +2-B
Table of Contents
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
The solution of Question 89 Chapter 4 of +2-B: –
| 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 |
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
