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“adjusted profit = 500000- 10000(10% of 100000) = 490000

fpr weighted average share
no.0f shares month bonus fraction weighted average share
at 1 april 400000 1/12 3/2 50000
at 1 may 600000 11/12 550000

eps= 490000/ (50000 +550000 ) = 0.81667 = 81.7 cent per share ”

1. If irredeemable preference share is treated as equity so why does not my equity share would be at 500,000 *1/12

Irredeemable preference shares are treated as equity in the accounts, therefore any dividend will be deducted within the SOCIE. When calculating the EPS we usually use the PBT figure from the SPL as this is the earnings that belong to the ordinary equity shareholders. However, the irredeemable preference dividend has not been removed from this figure as it will be deducted in the SOCIE. To get the right figure to use in the EPS calculation then we will need to deduct the irredeemable preference dividend from the PBT figure.

2. Why it is it reducing my PBT as it is Type of Equity dividend ?
If we are treating as equity it should not have right on preference dividend Paying.

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