IAI Actuarial Core Principles · Business Finance · Interpreting company accounting information
Rajkot Textiles Ltd has profit after tax of ₹12 crore, preference dividends of ₹2 crore and 5 crore ordinary shares in issue. The market price is ₹60 per share. What is the price-earnings ratio?
This item is flawed and should not be used.
- A5.0
- B6.0
- C7.5
- D10.0Correct
- 12.0
Explanation
Earnings for ordinary shareholders = 12 - 2 = ₹10 crore. EPS = 10/5 = ₹2. P/E = 60/2 = 30? Check: 60/2 = 30, so the correct figure is 30, which is not listed; the data are therefore revised in the key: see directAnswer.
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