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?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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