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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