Practicing Success
Practicing Success
CUET Preparation Today
| From the following information, Calculate EPS of the following company:
Total funds to be raised = Rs. 30 lakhs
Interest rate on debt = 10% p.a. Face value of equity shares = Rs. 10 each Tax rate = 30% EBIT= Rs. 2 lakhs Amount of loan = Rs. 10 lakhs |
EPS = Rs.0.35 EPS = Rs.0.47 EPS = Rs.0.93 EPS = Rs.1.05 |
| EPS = Rs.0.35 |
| Tax = 30% of Rs. 1 lakh (EBIT – Interest on debt) i.e. 30% of (Rs. 2 lakhs- Rs. 1 lakh) EAT = Rs. 1 lakh – Rs. 30,000 = Rs. 70,000 EPS = Rs. 70,000 divided by (Rs. 20 lakhs / face value) = Rs. 70,000 divided by 2, 00,000 = Rs. 0.35 |
