[nat99]

@raxy @huiru23
The bonus issue 11/10 is actually quite simple.

The questions says that the company made a 1 for 10 bonus issue. This means there will be 1 bonus share issued by the company for every 10 shares.

For instance, if I have 200 shares now, my bonus share will be 200 * 1/10 = 20 shares. In total, I will have 200+20= 220 shares, right?

So the other way of getting 220 shares will be 200*11/10 = 220 shares.

The concept goes the same in Fenton.

[nat99]

11/10 refers to the bonus issue, not the bonus fraction in rights issue. You have to treat them in different.

My personal way of calculating is different from what ACCA has laid out.

First, do the rights issue.
TERP = (1*1.75+4*2)/(1+4)=1.95
Bonus fraction = 2/1.95
At here, just leave the fraction at 2/1.95 because the decimal places will affect the answer later.

WA No.of shares will be :
1/1/20X1-31/1/20X1 – 1/12 *5mil*2/1.95
=427350
1/2/20X1-31/12/20X1 – 11/12*5mil*5/4
=5729167
Total WA No of shares = 6156517

For full market price, the treatment is also the same. Since question doesn’t ask to treat them SEPARATELY, so the WA of shares have to use what we got previously, ie 6156517.

WA No. of shares for FMP:
1/1/20X1-30/6/20X1 – 6/12*6156517
= 3078258.5
1/20X1-31/12/20X1 – 6/12*6156517
= 3140758.5
Right now the total WA No. of shares will be 6129017.

For the bonus issue part, as I mentioned in the first, it should be treated as follows:

WA of shares = 6219017 *11/10 = 6840919
I’m aware of the answer is 6840918, I know it’s the difference of decimal places that affects it.

So,
1.EPS 20×1 = $2.9mil/6840919 = 42.39c
2.EPS 20×0 = 46.4c *5mil /5mil*2/1.95*11/10 = 41.13c
Again my answers are in 2dcp, while the model answers are in 1dcp.

[nat99]

Hi there, shouldn’t the DEPS be 48.18c?
($25.2mil + $20mil*8%*75%) / [50mil+12mil*($2.5-$1.5)/$2.5]

And as for the Basic EPS , it is 63c.
$25.2mil/($10mil/0.25)

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