Fast Growth Ltd. gave the following information with a request to calculate the value of each of its equity shares: (i) Subscribed capital consists of fully paid up shares as follows: 10 lakh 13% Preference shares of ₹10

Particulars Amount (₹) Profit after depreciation but before taxation 1,80,00,000 Less: provision for tax @30% 54,00,000 Profit before transfer to General Reserve 1,26,00,000 Less: transfer to general Reserve 34,50,000 Divisible profits for dividend 91,50,000 Less: Dividend for preference shares @ 13% (10,00,000 shares * ₹10 * 13%) 13,00,000 Divisible profits available for equity shares 78,50,000 Rate of dividend per equity share = (78,50,000 / 2,00,00,000) × 100 = 39.25% Dividend rate in the industry = 20% Hence, value of each equity share: (39.25 / 20) × ₹10 = ₹19.63 against face value ₹10