Consideration to consider for EPS

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July 26, 2017 at 6:57 pm #398934
niki27
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Dear sir,
I have a question regarding consideration in EPS

In 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!
July 26, 2017 at 7:03 pm #398936
MikeLittle
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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?
July 26, 2017 at 7:47 pm #398941
niki27
Member
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Dear Sir,
Out of curiosity, what would we do with the dividend then?

If this has never been examined, would this sort of thing come up in the future?

Another quick question, are share splits and reverse share splits examined under F7?

Thanks!
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