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    q17 Format PDF

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    GANESH
    The document outlines the calculation of maximum amount allowed for a company's share buyback. It shows: 1) The company has Rs. 15.2 lakh in reserves and surplus from various sources. 2) 25% of the company's own funds of Rs. 75.2 lakh is Rs. 18.8 lakh. 3) Minimum own funds required is Rs. 55.2 lakh after deducting 50% of long term debt from own funds. 4) Maximum shares that can be bought back is 10,000 shares at 25% of total equity shares. 5) The maximum amount that can be spent on the buyback is Rs. 15.2 lakh, being the

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    q17 Format PDF

    Uploaded by

    GANESH
    26 views1 page
    The document outlines the calculation of maximum amount allowed for a company's share buyback. It shows: 1) The company has Rs. 15.2 lakh in reserves and surplus from various sources. 2) 25% of the company's own funds of Rs. 75.2 lakh is Rs. 18.8 lakh. 3) Minimum own funds required is Rs. 55.2 lakh after deducting 50% of long term debt from own funds. 4) Maximum shares that can be bought back is 10,000 shares at 25% of total equity shares. 5) The maximum amount that can be spent on the buyback is Rs. 15.2 lakh, being the

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    The document outlines the calculation of maximum amount allowed for a company's share buyback. It shows: 1) The company has Rs. 15.2 lakh in reserves and surplus from various sources. 2) 25% of the company's own funds of Rs. 75.2 lakh is Rs. 18.8 lakh. 3) Minimum own funds required is Rs. 55.2 lakh after deducting 50% of long term debt from own funds. 4) Maximum shares that can be bought back is 10,000 shares at 25% of total equity shares. 5) The maximum amount that can be spent on the buyback is Rs. 15.2 lakh, being the

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    26 views1 page

    q17 Format PDF

    Uploaded by

    GANESH
    The document outlines the calculation of maximum amount allowed for a company's share buyback. It shows: 1) The company has Rs. 15.2 lakh in reserves and surplus from various sources. 2) 25% of the company's own funds of Rs. 75.2 lakh is Rs. 18.8 lakh. 3) Minimum own funds required is Rs. 55.2 lakh after deducting 50% of long term debt from own funds. 4) Maximum shares that can be bought back is 10,000 shares at 25% of total equity shares. 5) The maximum amount that can be spent on the buyback is Rs. 15.2 lakh, being the

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    of 1

    Q.17..

    Step Conditions Rs. Rs.


    [1] Sources:
    a. General Reserve 8,00,000
    b. Profit and Loss A/c 4,00,000
    c. Securities Premium 3,20,000
    Reserve and Surplus 15,20,000
    [2] 25% Of Own Funds (Resources Test)
    a. Reserve and Surplus (As Above) 15,20,000
    b. Capital (Equity + Preference) (40L + 20L) 60,00,000
    c. OWN FUNDS (a + b) 75,20,000
    25% of Own Funds 18,80,000
    [3] Minimum Own Funds (Debt-Equity Ratio Test)
    a. Own Funds 75,20,000
    b. Less: 50% of Debt (Long Term) (40,00,000 * 50%) (20,00,000)
    Minimum Own Funds 55,20,000
    [4] a. 25% of Number of Equity Shares (40,000*25%) 10,000 Shares.
    [5] Maximum Possible Amount of Buy-Back 15,20,000
    [Least of 1 to 3]
    [6] Offer Price (15,20,000/10,000) 152
    You can buy back 10,000 equity shares of Rs. 100 each at Rs. 152 per share.

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