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      Question

      A company earns profit of Rs.175000 in the first year of

      operations. It’s issued capital consists of 70,000 shares of Rs.10 each. If the market value of the share is Rs.13, what will be the book value per share?
      A Rs.10 Correct Answer Incorrect Answer
      B Rs.13 Correct Answer Incorrect Answer
      C Rs.2.5 Correct Answer Incorrect Answer
      D Rs.12.5 Correct Answer Incorrect Answer
      E Rs.15.5 Correct Answer Incorrect Answer

      Solution

      Book value = Shareholders funds/no of shares Shareholders funds = issued capital + Reserves and surplus                                     = 70000*10 + 175000                                     = 875000 Book value per share = 875000/70000 = Rs.12.5

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