Waffle had share capital of $7.5 million in 50c equity shares at 1st October 20X6. On 1st January 20X7 it made an issue of 4 million share at full market price immediately followed by a 1 for 3 bonus issue.
The financial statements at 30 September 20X7 showed profit for the year of $12 million. What was the EPS for the year?
The answer is:
Shares (‘000)
b/f (7,500/0.5) 15,000
Full market price issue (4000×9/12) 3,000
Bonus issue (18,000/3) 6,000
Total 24,000
EPS= $12,000/24,000= $0.5
Now my question is why 18 million shares is divided by 3 when 15 million plus 4 million is 19 million shares. Bonus issue should be 1 for 3 on 19 million shares and not 18 million! Pls explain. I may be wrong
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Calculating EPS
6y ago#1Hi,
As the bonus issue is done immediately after the rights issue, the 4 million shares issued under the rights issue would not be entitled to the bonus issue of shares. Therefore they only use the 18 million.
Thanks
Ruth makes up it account to 30 June each year.On July 20×5 Ruth has 500m ordinary shared in issue.Profits for the year to 30/06/20×6 were $250.There were no preference shares in issue.Cal.the basic earnings per share assuming.
@ share capital has not changed during the year.
B.An issue of 50m new shares at full market price on 1 August 20×5
C.A 1 for 4 bonus issue occurring on 1 Nov 20×5
D.A 1 for 5 right issue on 1 Feb 20×6 held at $1.25.The price of a share immediately before the right issue was $1.40
6y ago#3@albydanny said: Ruth makes up it account to 30 June each year.On July 20×5 Ruth has 500m ordinary shared in issue.Profits for the year to 30/06/20×6 were $250.There were no preference shares in issue.Cal.the basic earnings per share assuming. @ share capital has not changed during the year. B.An issue of 50m new shares at full market price on 1 August 20×5 C.A 1 for 4 bonus issue occurring on 1 Nov 20×5 D.A 1 for 5 right issue on 1 Feb 20×6 held at $1.25.The price of a share immediately before the right issue was $1.40Hi, So what is it exactly that you are wanting me to do? You haven't been clear. Thanks
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