Question 90 Chapter 4 of +2-B
Table of Contents
Earning Per Share, Dividend Per Share. Price Earning Ratio
90. The capital of a limited company is as follows :
| ₹ | |
| 10% preference shares of 10 each | 2,00,000 |
| Equity shares of 10 each | 10,00,000 |
| 12,00,000 |
Net profit after tax 4,20,000. Profit distributed as dividend 50%.
The market price of equity share is ₹ 35.
You are required to calculate
(i)Earning per share
(ii) Dividend per share
(iii) Price Earning Ratio
The solution of Question 90 Chapter 4 of +2-B: –
| Earnings per Share | = | Net profit after Interest and Tax Preference Dividend |
| Number of Equity Shares | ||
| = | ||
| = | ₹ 4,00,000 | |
| 1,00,000 | ||
| = | ₹ 4 |
| Dividend Per share | = | Profit distributed as equity share |
| Number of equity shares | ||
| = | ||
| = | ₹ 2,00,000 | |
| 1,00,000 | ||
| = | ₹ 2 |
| Price Earning Ratio | = | Market price per share |
| Earning per share | ||
| = | ||
| = | ₹ 35 | |
| ₹ 4 | ||
| = | 8.75 times |
| Preference Dividend | = | 10% Preference share | ||
| = | 10 | X | ₹ 2,00,000 | |
| 100 | ||||
| = | ₹ 20,000 | |||
| Net profit preference Dividend | = | Profit after tax – Preference Dividend | ||
| = | ₹ 4,20,000 – ₹ 20,000 | |||
| = | ₹ 4,00,000 |
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
