Question 90 Chapter 4 of +2-B

Question 90 Chapter 4 of +2-B

Earning Per Share, Dividend Per Share. Price Earning Ratio Not For PSEB Students)

90. The capital of a limited company is as follows :

 
10% preference shares of 10 each2,00,000
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  
 =10X₹ 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

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 90 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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