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    Question

    A company has 10 million shares of face value Rs.10

    each, issued in the market. The current book value of the share is Rs.30 and market price is Rs.50. What is the market capitalisation of the company?
    A Rs.500 Million Correct Answer Incorrect Answer
    B Rs.300 Million Correct Answer Incorrect Answer
    C Rs.100 Million Correct Answer Incorrect Answer
    D Rs.2500 Million Correct Answer Incorrect Answer
    E Cannot be calculated Correct Answer Incorrect Answer

    Solution

    Market capitalisation denotes the market value of a company. It is calculated by multiplying the current share price (market price) by the number of shared issued by the company. In this case Market Capitalisation is 10 million x 50 = Rs.500 million.

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