The following figures relate to a company which has 10,00,000 in Equity Shares and 3,00,000 in
Question:
The following figures relate to a company which has ₹ 10,00,000 in Equity Shares and ₹3,00,000 in 9%, Preference shares, all of ₹100 each:
The company has investments worth ₹ 2,80,000 (at market value) on the valuation date, the yield in respect of which has been excluded in arriving at the adjusted tax profit figures. It is customary for similar types of companies to set aside 25% of the taxed profit for rehabilitation and replacement purposes. On the valuation date, the net worth (excluding investments) amount to ₹ 22,50,000. The normal rate of return expected is 9%. The company has paid dividends consistently within a range of 8% to 10% on equity shares over the previous seven years and it expects to maintain the same. You are required to ascertain the value of each equity share on the basis of productivity, applying suitable weighted averaging.
Step by Step Answer:
Corporate Accounting As Per The Companies Act 2013 Including Rules 2014 And 2015
ISBN: 9789352605569
2nd Edition
Authors: M Hanif, A Mukherjee