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Dear sir,
I have a question regarding consideration in EPSIn the BPP text , there’s a line that says, ” If ordinary shares are partly paid, they are treated as a fraction of an ordinary share to the extent that they are entitled to dividends relative to fully paid ordinary shares.”
Now, correct me if I’m wrong, but does this mean that if these shares are partly paid, it would only be considered fraction wise in the weighing of the ordinary shares outstanding, but the shareholders would get full dividend as if they had paid it in full?
I’d be grateful if you could answer this query.
Thanks!
That’s not how I would interpret those words
It really is of academic interest anyway – I’ve never ever seen this concept in any exam question
Normally where there are partly paid shares (say 50,000 $1 equity shares 70 cents paid) we simply bring into the weighted average calculation 50,000 x .70 = 35,000 equivalent shares
OK?
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