The company is yet to declare its maiden dividend. A revaluation reveals that the fixed assets as on…

Model: Value of two classes of shares intrinsic method X Ltd. started its business on 1 April 2007. On 31 March 2010, its balance sheet in a summarized form was as follows:

Liabilities

Assets

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Share Capital: 10,000, 12% Preference

Fixed Costs (Less Depreciation)

25,00,000

Shares of Rs. 100 Each, Fully Paid

10,00,000

Current Assets

35,00,000

2,50,000 Equity Shares of Rs. 10 Each, Fully

25,00,000

Preliminary Expenses

25,000

Paid

Profit Prior to Incorporation

25,000

P&L A/c

5,00,000

15% Debentures

4,00,000

Sundry Creditors

14,00,000

Provision for Income Tax

2,00,000

60,25,000

60,25,000

The company is yet to declare its maiden dividend. A revaluation reveals that the fixed assets as on 31 March 2010 are really worth Rs.30,00,000. Calculate the intrinsic value of two classes of shares.

 

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