n NISM Certifications
XV NISM Series XV
Medium

A company has a market capitalization of Rs 5,40,000, a book value per share of Rs 35, a P/E ratio of 9, and an EPS of Rs 6. Calculate the company’s net worth.

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs 40,000

  2. B

    Rs 35,000

  3. Rs 3,50,000

    Correct answer

  4. D

    Rs 4,00,000

Why this is the answer

Market Price per Share = P/E × EPS = 9 × 6 = Rs 54 Number of Shares = Market Cap ÷ Market Price = 5,40,000 ÷ 54 = 10,000 Net Worth = Book Value per Share × Number of Shares = 35 × 10,000 = Rs 3,50,000

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