Following are the information of two companies for the year endeMarch. '2008 Particular Company Company A B Equity Share of $. 10 each 8,00,000 10,00,000 10% Pref. Shares of $. 10 each Profit after tax 6,00,000 4,00,000 3,00,000 3,00,000 Assume the Market expectation is 18% and 80% of the Profits are distributed. (i) Nihat is the rate you would pay to the Equity Shares of each Company? (i) What is the rate you would pay to equity shares of each company? If you are buying a small lot. If you are buying controlling interest shares. (ii) If you plan to invest only in preference shares which company's preference would you prefer? (iii)Would your rates be different for buying small lot, if the company 'A' retains 30%81 company 'B' 10% of the profits ?
