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%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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