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From the following particulars calculate the value of an equity share under yield method. 1. 5,000 9% preference shares of $100 each $ 500,000. 125,000 equity shares of $10 each, $ 8 per share paid up $1,000,000. 2. Expected profits before tax $545,000. Rate of taxation is 40%. 3. Transfer to general reserve, every year 20% of profit. 4. Normal rate of earnings from this type of business is 15%.

From the following particulars calculate the value of an equity share under yield method. 1. 5,000 9% preference shares of $100 each $ 500,000. 125,000 equity shares of $10 each, $ 8 per share paid up $1,000,000. 2. Expected profits before tax $545,000. Rate of taxation is 40%. 3. Transfer to general reserve, every year 20% of profit. 4. Normal rate of earnings from this type of business is 15%.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 12RE: Given the following year-end information, compute Greenwood Corporations basic and diluted earnings...
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From the following particulars calculate the value of an equity share under yield method. 1. 5,000 9% preference shares of $100 each $ 500,000. 125,000 equity shares of $10 each, $ 8 per share paid up $1,000,000. 2. Expected profits before tax $545,000. Rate of taxation is 40%. 3. Transfer to general reserve, every year 20% of profit. 4. Normal rate of earnings from this type of business is 15%.
Transcribed Image Text:From the following particulars calculate the value of an equity share under yield method. 1. 5,000 9% preference shares of $100 each $ 500,000. 125,000 equity shares of $10 each, $ 8 per share paid up $1,000,000. 2. Expected profits before tax $545,000. Rate of taxation is 40%. 3. Transfer to general reserve, every year 20% of profit. 4. Normal rate of earnings from this type of business is 15%.
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