if you plan to invest only in preference shares which company rsquo s preference sha 620670
Following is the information of two companies for the year ended 31 March 2010:
|
Company |
Company |
|
|
X |
Y |
|
|
Equity shares of 10 each |
16,00,000 |
20,00,000 |
|
10% Preference shares of 10 each |
12,00,000 |
8,00,000 |
|
Profit after tax |
6,00,000 |
6,00,000 |
Assume that the market expectation is 18% and 80% of the profits are distributed.
- What is the rate you would pay to the equity shares of each company
- If you are buying a small lot
- If you are buying controlling interested shares
If you plan to invest only in preference shares, which company’s preference shares would you prefer?