The share capital of Suraj Ltd. is ₹1,00,00,000 (60,000 equity shares of ₹100 each and 4,00,000, 12.5% preference shares of ₹10 each). The company has earned a profit of ₹65,00,000 after payment of 35% income-tax amounti

CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · December 2015
The share capital of Suraj Ltd. is ₹1,00,00,000 (60,000 equity shares of ₹100 each and 4,00,000, 12.5% preference shares of ₹10 each). The company has earned a profit of ₹65,00,000 after payment of 35% income-tax amounting to ₹35,00,000. Calculate earnings per share (EPS) of Suraj Ltd.

Answer & Explanation:

Profit After Tax ₹65,00,000 Less Preference Dividend @12.5% on 40,00,000 (4,00,000 shares * ₹10 * 12.5%) ₹5,00,000 Profit available for equity shareholders ₹60,00,000 EPS = ₹60,00,000 / 60,000 = ₹100 per share.

Topics: Valuation

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