n NISM Certifications
XV NISM Series XV
Medium

A company has a paid-up capital of ₹25,00,000 with a face value of ₹5 per share. Its P/E ratio is 12 and EPS is ₹7. The company has no debt and cash equivalents of ₹33 lakhs. What is the Enterprise Value?

Practice question from NISM XV Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs 50,00,000

  2. B

    Rs 2,74,00,000

  3. C

    Rs 4,22,00,000

  4. Rs 3,87,00,000

    Correct answer

Why this is the answer

Number of shares = 25,00,000 ÷ 5 = 5,00,000. Market price per share = 12 × 7 = ₹84. Market capitalisation = 5,00,000 × 84 = ₹4,20,00,000. Enterprise Value = Market cap + Debt − Cash = 4,20,00,000 − 33,00,000 = ₹3,87,00,000.

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