Capital of Great India Ltd. comprise 1,000 6% participating preference shares of (10) Rs. 100 each and 4000 equity shares

Capital of Great India Ltd. comprise 1,000 6% participating preference shares of (10) Rs. 100 each and 4000 equity shares of Rs. 100 each fully paid. Preference shares

are entitled to participate in profits to the extent of 4% after payment of an equity
dividend of 10%. Balance of profit is available for equity shareholders. The Company’s normal profit (Less tax) is Rs 75000. Normal Rate of dividend to this
type of Company is 8% on participating preference shares and 10% on equity
shares. Determine the value of each type of shares on the basis of Dividend Yield Method.


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