Ratio Illustration 4


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Following information is available relating to A Ltd. and B Ltd.

Particulars A Ltd.

( in Lakhs)

B Ltd.

( in Lakhs)

Equity Share Capital ( 10) 200 250
10% Preference Share Capital   80 100
15% Debentures   20   60
Profit before Interest and Taxes   60   80
Proposed Dividend   20   25
Provision for tax   17   21
Market Price per share           50              60

You are required to calculate: (i) EPS, (ii) P/E Ratio, (iii) Dividend Payout Ratio, (iv) Dividend yield and advise which company’s share is worth investing.


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