Question

Capital of great India Ltd. Comprise 1000 6% participating preference shares of rs. 100 each and 4000 equity shares of rs. 100 each fully paid. Preference shares are entitled to participate in profits to the extent of 4% after payment of an equity dividend of 10% balance of profit is available for equity share holder. The company's normal profit (less tax) is rs. 75000. Normal rate of dividend to this type of company is 8% on participating preference shares and 10% on equity shares. Determine the value of each type of shares on the basis of dividend yield method.​

Answer 1

Answer:

100 each fully paid. Preference shares are entitled to participate in profits to the extent of 4% after payment of an equity

3