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Question: The share capital at 1 November 20X2 comprised 1,800,000 ordinary shares of $0.50 each. On 1 February 20X3, Gibraltar Co made a 1 for 5 rights issue for $1 per share. The market price of existing shares prior to the rights issue was $1.60. No adjustment has been made for the rights issue.
EPS of 20X2: 0.20Requirement: restate 20X2 EPS
My answer: Profit of 20X2 = 0.20 * 1.800.000 = 360.000
WA #Shares = 2.100.000
360.000/2.100.000 = 0.17ACCA answer: Theoretical ex-rights value per share = $9/6 shares = $1·50
Restated 20X2 EPS of 20c x $1·50/$1·60 = 18·75c rounded to 19cWhat am I missing here?
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