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Hey,
I was wondering if there is mistake in Q2 of the Chapter 21. If I am not mistaken, the bonus issue is deemed to have been issued at the beginning of the year. Therefore, the weighted #shares should be 4,928,571.43, and not 4,500,000.
Months #shares For Year [Months *#shares]
Shares
12 X 2,000,000 = 24,000,000
6 X 3,000,000 = 18,000,000
Bonus
12 X 1,428,571 = 17,142,857
==============================
Total = 59,142,857
# months = 12Ave. # shares = 59,142,857 /12 = 4,928,571
NEW EPS 0.122
OLD EPS 0.160
Restated EPS 0.093“If I am not mistaken …”
Sadly, you are mistaken!
How can you have a 2 for 7 bonus issue on the 3,000,000 shares issued only half way through the year and claim that those bonus shares were effective from the start of the year
Bonus shares issued relating to shares issued part way through the year can only be effectively issued from the date of that mid-year share issue
If you were to follow the logic of my WANES table you would not have made that mistake … and that’s exactly the reason why I set out the table my way and not do the Wanes calculation your way … I find that my way is easier and never wrong (subject to my own inadequacies with a calculator!)
OK?
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