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CMA Final · Strategic Performance Management and Business Valuation · Fundamentals of Business Valuation

Rohan Textiles has net assets (assets less external liabilities) with a fair value of Rs 8,40,000 after revaluation. It has 60,000 equity shares outstanding. Under the net asset method, the value per share is:

The value per share is Rs 14. Under the net asset method, fair value of net assets after meeting external liabilities, Rs 8,40,000, is divided by the 60,000 equity shares outstanding, which gives Rs 14.00 per share.

  1. ARs 14.00Correct
  2. BRs 12.00
  3. CRs 16.80
  4. DRs 140.00

Explanation

Net asset value per share = 8,40,000 / 60,000 = Rs 14. Rs 12 would result from using a wrong share count of 70,000. Rs 16.80 would result from using 50,000 shares. Rs 140 is a decimal-place error.

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