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A company XYZ requires a total sum of $500K which may fetch a return of 10%. The company raises $500K in the following manner

i) By issuing6% debenture- $200K ii) By issuing8% preference shares-$100K i) By issuing of equity shares-$200K Then company will have to pay profit earned $50K(10% of $500K) as a) Debenture holders- $6K, Preference shareholders-$8K, Equity holders-$36K b) Debenture holders- $12K, Preference shareholders-$8K, Equity holders-$30K c) Debenture holders- $15K, Preference shareholders-$10K, Equity holders-$25K c) Debenture holders- $10K, Preference shareholders-$15K, Equity holders-$25K

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Question ajoutée par Jerry Easow Thomas , General Accountant , Masar Medical
Date de publication: 2014/07/27
Manju Maharjan
par Manju Maharjan , Accountant , Ibeja International Pvt. Ltd.

When profit is to be paid, priority should be given to debenture holder, i.e.6% * $200k = $12k.

Then, it should be paid to preference share holder, i.e.8% * $100k =

Jerry Easow Thomas
par Jerry Easow Thomas , General Accountant , Masar Medical

b) Debenture holders- $12K, Preference shareholders-$8K, Equity holders-$30K

 

Profit -                                  50,000   -

 

To Debenture Holders-          12,000   (2,00,000*6%)

 

                                            38,000

 

To Pref. Stakeholders-         8,000     (1,00,000*8%)

 

Balance to Equity Holders     30,000

 

i.e, Equity share Holders will get15%((30,000/2,00,000)*100) of dividend.