Determine the earning per share in each plan

Assignment Help Managerial Accounting
Reference no: EM132640809

A Ltd. Company has equity shares capital of Rs. 500000 dividend into shares of Rs. 100 each, it wishes to raise further Rs. 300000 for expansion cum modernisation plans. The company plans the following financing schemes:

1) All equity stock

2) Rs. 100000 in equity shares and Rs

3) 200000 in 10% debentures.

4) Al debt at 10% per annum

5) Rs. 100000 in equity shares and Rs. 200000 in preference capital with the rate is dividend at 8%.

The company's existing earnings before interest and tax(EBIT) is Rs. 150000. The corporate rate of tax is 50%.

Problem 1: You are required to determine the earning per share in each plan and comment on the implication of financial leverage.

Reference no: EM132640809

Questions Cloud

Journalize the adjusting entries that were made on july : Journalize (a) the July transactions and (b) the adjusting entries that were made on July 31. (Hint: July transactions were for cash.)
Business requirements document for hollywood organic : You will continue building the components of your business requirements document for Hollywood Organic Co-op.
Study of universe has been on-going for decades : The beginning of chapter 4 has two pictures of galaxies. The study of the universe has been on-going for decades.
Mergers and acquisitions in the pharmaceutical industry : Choose one specific deal exceeding 40 billion dollars in the Pharmaceutical Industry and synthesise its benefits and costs.
Determine the earning per share in each plan : A Ltd. Company has equity shares capital of Rs. 500000.Determine the earning per share in each plan and comment on the implication of financial leverage.
Case study-zippy print enterprises ltd : Summarize the important facts (related to that area of the law). 3. State the main legal issue(s) (those that reflect the area of law above).
What is difference between internet and internet : What is the difference between internet and Internet? Name the four basic network topologies, and cite an advantage of each type in your own words?
Gain majority control of semen gresik : Why do you think Cemex decided to exit Indonesia after failing to gain majority control of Semen Gresik? Why is majority control so important to Cemex?
Government planning vs. entrepreneurial innovation : Find a peer-reviewed scholarly journal article discussing government planning and/or entrepreneurial innovation.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Select the two most important learning points on data lakes

Select the two most important learning points on Data Lakes. Emphasize your personal thoughts and scholarly reflection.

  Make general journal entries to record the transactions

Make general journal entries to record the transactions and the depreciation journal entries required at the end of each reporting period

  What would you advise mr frank to do

What would you advise Mr. Frank to do? Compare the advantages and disadvantages of the system each company uses. - Diagram the flow of costs

  Determine the firm break-even point in units was

Determine the firm's break-even point in units was? In Keegan Corporation's most recent fiscal year, the company reported pretax earnings of $221,000.

  Being ethical as a business can be costly

Since the board of directors is made up of human beings with selfish tendencies, formation of board of directors irrespective of its configuration

  Find what will be total net income if the line is dropped

Find What will be total net income if the line is dropped? Assume none of the fixed expenses for the hard rubber line are avoidable.

  Discuss briefly the five principles of lean thinking

Discuss briefly the five principles of lean thinking? Can you describe the lean accounting?Describe the basics of lean accounting and productivity measurement

  Calculate break-even point in terms of take a sales

Identify sales of the company assuming target profit of 500000 taka per month. Calculate break-even point in terms of take a sales and sales in units.

  Compute the cost that would be assigned to the ending

Compute the cost that would be assigned to the ending Work in Process inventory for the period. A company uses the weighted-average method for inventory costing

  Find what is the entry to record the dividend

Stock dividend of 4805 shares. At the time of the stock dividend, the market value per share was $13. The entry to record this dividend is what?

  Estimating costs based on behavior patterns

Estimating costs based on behavior patterns. The following information provides the amount of cost incurred in August for the cost items indicated. During August, 8,000 units of the firm's single product were manufactured.

  Calculate the revised break-even point

The projected sales for the following year for products X, Y, and Z are $800,000, $500,000 and $900,000 respectively. Calculate the revised break-even point (in

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