Read the following information carefully and answer the question.
The Balance Sheet of ABC Ltd as on 31 March 2022:
| Liabilities | Amount (₹) |
Asset | Amount (₹) |
| Share Capital Equity(₹10) | 4,00,000 | Fixed Assets | 9,50,000 |
| 12% preference shares | 1,00,000 | Current Assets | 2,34,000 |
| General Reserve | 1,84,000 | ||
| 10% Debentures | 4,00,000 | ||
| Current Liabilities | 1,00,000 | ||
| 11,84,000 | 11,84,000 |
Additional information :
1. Market price of share = 34
2. Net profit after tax = 1,50,000
3. Tax = 50,000
Book Value per share will be :
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹14.60.
Book value per share = Equity shareholders funds/ No. of equity shares
= 5,84,000/40,000
= ₹14.6
Shareholders’ Fund = Equity Share Capital + Preference Share Capital + General Reserve
= 4,00,000 + 1,00,000 + 1,84,000
= 6,84,000
Equity shareholder fund = Shareholders’ Funds – Preference Share Capital.
= 6,84,000 - 1,00,000
= 5,84,000
No of shares = 4,00,000/10
= 40,000