The following details are available in respect of LM Ltd
|
(Rs. in lakhs) |
|
|
PBIT for the year ended 31 December 2009 |
40.00 |
|
13% Secured loans as on 31 December2009 |
20.00 |
|
12% Preference shares of Rs.100 each fully paid as on 31 December 2009 |
20.00 |
|
20,000 Equity shares of Rs.100 each Rs.80 paid-up as on 31 December 2009 |
16.00 |
|
80,000 Equity shares of Rs.100 each fully paid as on 31 December 2009 |
80.00 |
|
Reserves and surplus as on 1 January 2009 |
20.00 |
|
Preliminary expenses as on 31 December 2009. |
15.830 |
Other information:
- Corporate tax rate: 35%
- Dividend distribution tax: 10%
- Ignore surcharge
- Transfer to general reserve: 20% of PAT
- Normal dividend rate in the same industry: 12.5%
- Dividend declared @ 15% on paid-up equity capital
- Market rate of EPS: Rs.20 per share of Rs.100
You are required to compute the value of different classes of equity shares on the basis of:
- Asset backing method
- Dividend yield method
- Earning yield method
[Working required: (i) balance of P&L A/c as on 31 December 2009 & (ii) earning percentage]