F7 Chapter 21 Questions
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In question 4, why isn’t dividend deducted from PAT?
When we’re looking at “earnings per share” the figure that we take for “earnings” is the profit after tax for the year attributable to the equity shareholders
Well, the WHOLE (in this example) of the profit after tax is attributable to the equity shareholders
The fact that these shareholders have already received some of those attributable profits by way of dividend is irrelevant for the EPS calculation
OK?
and from where bonus of 4/3 comes from ?
In answer to both this post AND your previous post (where has “8” come from) … I’m speechless!
Your questions indicate that you’re trying to understand financial calculations without having read the course notes that explain fully and clearly how to arrive at the bonus fraction and the rights fraction
It’s not possible to answer a question on the topic of earnings per share without first understanding how to arrive at these fractions
Look at the course notes, follow through the easy illustrative examples in those notes, and then have another look at these chapter summary questions
Then, if you still have problems, post again but, if you want to be certain that I shall see your post, put it on the Ask ACCA Tutor forum – I only very occasionally visit the “recent comments” section
OK?
in first question, from where we got 8? i mean the calculation of 4.00/8 ?
for question 1 how to get 384?
A 1 for 7 bonus issue on 336 shares gives us 336/7 new shares issued = 48 new shares
There already were 336 shares in issue and now there are an extra 48
336 + 48 = 384
OK?
Sir, in this qn I’m not able to find the weighted avg no of shares in issue
Which question?
Eight plc question no.2
And why can you not follow the workings that are shown in the answer?
I’ve just recalculated wanes and I arrive still at 139,350,877
I’m not following this method…Plss answer this qn with another method
Calculate how many shares are in existence with effect from each successive date where the number of shares changes
Calculate the periods of time during which that number of shares were in issue
Calculate the bonus fraction and the rights fraction and apply those fractions to all periods prior to the bonus and rights issues respectively
Multiply through:
Number of shares x fraction of a year x bonus and rights fractions as appropriate
Add up
You ask me to do it in a different way.
I don’t know a different way! Why would I? I’ve never had any problems doing it this way!
Look at the solution again and try to rationalize what we are doing at each step of the way
Can u pls explain this Fenton question?
Could you please explain question 1 ?
The issue of bonus shares makes it confusing. I couldn’t understand from the solution given
Thank you?
Can i have your explanation about Q2?
i got the answer ,thank you
Well, that was easy!
What is a mid market price?
Shares, when the price is quoted on the stock exchange, are actually quoted as two prices. For example, a share may have a quoted price of $3.20 – $3.32
The lower of those prices is the value that you would receive if you wished to sell shares in that company
The higher of the two prices is the amount that you would have to pay if you wished to buy shares in that company
The 12 cent difference is technically called “the jobber’s turn” – but you don’t need to know that!
Where our share is quoted at $3.20 – $3.32, the mid-market price would be $3.26
OK?
This question would have been better asked on the Ask ACCA Tutor F7 page – that way you would have guaranteed a response from me. As it is, it was just by chance that I happened to see your post
Which question has $10 million 25 cent shares?
How do we do the apportionment of shared issued mid month
Hi.when its is said that the issued shares share capita is $10million.its shares are denominated at 25cents each what does that mean can u explain and do the calculation for me please.