Model: Value of two classes of shares intrinsic method X Ltd. started its business on 1 April 2007. On 31 March 2010, its balance sheet in a summarized form was as follows:
|
Liabilities |
Assets |
||
|
Share Capital: 10,000, 12% Preference |
Fixed Costs (Less Depreciation) |
25,00,000 |
|
|
Shares of Rs. 100 Each, Fully Paid |
10,00,000 |
Current Assets |
35,00,000 |
|
2,50,000 Equity Shares of Rs. 10 Each, Fully |
25,00,000 |
Preliminary Expenses |
25,000 |
|
Paid |
|||
|
Profit Prior to Incorporation |
25,000 |
||
|
P&L A/c |
5,00,000 |
||
|
15% Debentures |
4,00,000 |
||
|
Sundry Creditors |
14,00,000 |
||
|
Provision for Income Tax |
2,00,000 |
||
|
60,25,000 |
60,25,000 |
The company is yet to declare its maiden dividend. A revaluation reveals that the fixed assets as on 31 March 2010 are really worth Rs.30,00,000. Calculate the intrinsic value of two classes of shares.