Problem 11 (Valuation of Shares on Price Earnings Ratio).The capital structure of a company is as follows: $ $ $ 12% Preference shares of $ 10 each 5,00,000 10% Debentures 6,00,000 Equity shares of $10 each 8,00,000 11% Term Loan 7,00,000 Reserves and Surplus 4,00,000 The average annual profit before payment of tax and interest is $6,00,000. The income tax rate is 45%.Yoou are required to state what valuation should be put upon the equity shares of the company if the applicable price- earnings ratio is 9