Hi, could anyone help me with this question?
The profit after tax for Barstead for the year ended 30 September 2009 was $15 million. At 1 October 2008 the company had in issue 36 million equity shares and a $10 million 8% convertible loan note. The loan note will mature in 2010 and will be redeemed at par or converted to equity shares on the basis of 25 shares for each $100 of loan note at the loan-note holders’ option. On 1 January 2009 Barstead made a fully subscribed rights issue of one new share for every four shares held at a price of $2•80 each. The market price of the equity shares of Barstead immediately before the issue was $3•80. The earnings per share (EPS) reported for the year ended 30 September 2008 was 35 cents.
Barstead’s income tax rate is 25%.
I can't figure out why the comparative basic EPS (2008) is calculated as: 35*3.6/3.8=33.2c
Many thanks.
The profit after tax for Barstead for the year ended 30 September 2009 was $15 million. At 1 October 2008 the company had in issue 36 million equity shares and a $10 million 8% convertible loan note. The loan note will mature in 2010 and will be redeemed at par or converted to equity shares on the basis of 25 shares for each $100 of loan note at the loan-note holders’ option. On 1 January 2009 Barstead made a fully subscribed rights issue of one new share for every four shares held at a price of $2•80 each. The market price of the equity shares of Barstead immediately before the issue was $3•80. The earnings per share (EPS) reported for the year ended 30 September 2008 was 35 cents.
Barstead’s income tax rate is 25%.
I can't figure out why the comparative basic EPS (2008) is calculated as: 35*3.6/3.8=33.2c
Many thanks.
