Evaluate the earnings per share, Financial Accounting

Assignment Help:

Q. A ltd. Company has equity share capital of Rs. 5,00,000 divided into shares of Rs. 100 each. It wishes to gain further Rs. 3,00,000 for expansion cum modernization plans. The company plans the given financing schemes:

a) All Equity stock

b) All debt at 10% per annum

c) Rs. 1,00,000 in equity shares and Rs. 2,00,000 in 10% debentures 

d) Rs. 1,00,000 in equity shares and Rs. 2,00,000 in preference capital with the rate of dividend at 8%

The company's existing earnings before interest and tax (EBIT) is Rs. 1,50,000. The corporate rate of tax is 50%. You are required to evaluate the earnings per share (EPS) in each plan and comment on the implications of financial leverage.


Related Discussions:- Evaluate the earnings per share

Holding company with a direct shareholding in sub-subsidiary, Holding compa...

Holding company with a direct shareholding in sub-subsidiary company Under this type of structure, both the holding and subsidiary company have some shareholding in the sub-subsi

Fraudulent preferences-fraudulent conveyances, Fraudulent preferences ...

Fraudulent preferences The trustee can set aside any transaction effected within the six months preceding the presentation of the petition in circumstances such as to make it

Capital recovery factor, Equation illustrates the relationship in between P...

Equation illustrates the relationship in between PVA n , A, K and n. So manipulating this a bit: We find that A = PVA n [(k (1 + k) n )/((1 +k) n - 1)] [(k (1 + k) n )/(

Show advantages of financial intermediation, Q. Show Advantages of financia...

Q. Show Advantages of financial intermediation? The advantages of financial intermediation are as follows Investors are able to pool their funds in a bank deposit account to

Financial decision making, how do i write an assignment about financial dec...

how do i write an assignment about financial decision making

Regulated investment company, Regulated Investment Company (RIC) - Commonly...

Regulated Investment Company (RIC) - Commonly known as a MUTUAL FUND, this is a domestic corporation which acts as an investment agent for its shareholders by typically investing i

Auditing., assess the risk of material misstatement at assertion level

assess the risk of material misstatement at assertion level

Help, I need help with my homework

I need help with my homework

Income statement, depreciation in question is given more and in adjustment ...

depreciation in question is given more and in adjustment is less. What would be in the profit and loss account?

Internal and external analysis on accounting, Write at least 7 full pages t...

Write at least 7 full pages that analyzes the internal and external environments for your organization. This paper must be in essay form. [If you have formatting questions, refer t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd