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Financing decisions

Financial Management

In free courses, 2nd video ofcapital structure , financing decisions question. How it is justifiable for giving the same EPS for both existing n for new shareholders.old shareholders give only 10/-.where as new shareholders are contributing 10/-facevalue & 40/- premium togetherly 50/-.but old are also taking same EPS as new people takes

Divya tejasri

CA Inter

★ 13K+

20-Feb-20 14:27

470

Answers (2)

EPS is always computed based on the number of shares irrespective of the price paid for the purchase. Also, dividend is paid on face value irrespective of the issue price.