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Question

From the following information calculate (i) Earning per share

(iI) Price earning ratio

Particulars (Rs.)

70,000 equity shares of Rs. 10 each 7,00,000

Net Profit after tax but before dividend 1,75,000; Market price of a share 13

Dividend declared @15%

A 5.2 and 2.5 Correct Answer Incorrect Answer
B 2.5 and 5.2 Correct Answer Incorrect Answer
C 2.4 and 5.2 Correct Answer Incorrect Answer
D 5.2 and 2.4 Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Earning per share = Profit available for Equity Shareholders/Number of Equity Shares =Rs. 1,75,000/Rs70,000 =2.50 Price Earning Ratio = Market Price per share/EPS = 13/2.5 = 5.2

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