- This topic has 1 reply, 2 voices, and was last updated 6 years ago by
.
- Posts
example 2, page 118, how the after issue part was calculated?
1.11.08 6,428,571 4/12 2,142,857. The 6428,571?Also if we dont adjust by bonus fraction it is easy to come to the same result of 4500,000 after the issue. If we assume that bonus is done at the beginning of the year. is it always necessary to adjust for bonus fraction?Thanks.
“how the after issue part was calculated?”
There was a “2 for 7” bonus issue so, for every 7 shares held before the bonus, 2 new shares were issued
And there were 5 million shares in issue before that bonus
So 5,000,000 / 7 = 714,285.7
And 714,285.7 * 2 = 1,428,571 new bonus shares issued
And they are added on to the 5,000,000 shares held before the bonus so 6,428,571 shares are in issue after the bonus
OK?
“If we assume that bonus is done at the beginning of the year”
Agreed, because the bonus fraction is applied to the 5,000,000 shares as at the date of the bonus, but it is also applied (by multiplying by the bonus fraction) to all periods PRIOR to the bonus issue – in this case, by multiplying by 9/7
“is it always necessary to adjust for bonus fraction?”
I don’t know – I’ve never tested it. It’s just something that I have always done and it has always resulted in the correct answer
🙂
OK?
- The topic ‘EPS/bonus issue’ is closed to new replies.