waffle had share capital of 7.5million in 50c equity shares at october 20x6 . on january 20x7 it made an issue of 4 million shares at full market price immediately followed by a 1 for 3 bonus issye the financial statement at 30 september 20x7 showed profit for the year of 12 million .
what wa sEPS for the year
A 53c
B 73c
C 48c
D 50c
therefore 15000 shares then + 4000*9/12 (jan to sep)+ 18000/3 bonus issue the we get ans D 50c
but doubt is we should do on outstanding bases right
then it should be 15000*3/12 (oct to dec) can you clarify me sir
thank you in advance
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eps
15,000,000 x 3/12 x 4/3 = 5,000,000
(19,000,000 + 6,333,333) x 9/12 = 19,000,000
WANES = 24,000,000
Earnings are 12,000,000
Therefore EPS is 12,000 / 24,000 = 50c per share
Post again if you don't understand
:-)
thank you sir i got it
You're welcome
Ifeomi, it's been corrected!
can you please explain how do you get this one
(19,000,000 + 6,333,333) x 9/12 = 19,000,000
6,333,333?
Hi,
They had 19,000,000 shares and did a one-for-three bonus issue, so multiply the 19,000,000 by 1/3 to give the 6,333,333.
Thanks
Can you explain please where 4/3 came from in this equation
15,000,000 x 3/12 x 4/3 = 5,000,000
And also the 15 000 000.
Thank you so much
It is the bonus fraction. They did a 1-for-3 bonus issue. There were 3 shares in issue before and 4 after, hence 4/3.
Thanks
Hi sir, I have a question here, for the fresh issue of 4000 on 1 Jan, why doesn't it required to multiply by the bonus fraction?
My workings:
1 OCt x6 15000 x 3/12 x 4/3 = 5000
1 Jan x7 4000
--------
19000 x 9/12 x 4/3 =19000
(bonus1/3) 6333 x 9/12 = 4749.75
------------
28749.75
Thank you.
Hi,
You only apply the fraction to the shares that have been in issue previously to take account of the free shares that have been issued. The 4,000 are the free shares that have been issued and so there is no need to make an adjustment.
Thanks
Thank you Sir,
So for the 4000 is not required to multiply by the bonus fraction as it is issued on the same date as the bonus issue, and not been issue previously, did i interpret it correctly?
thank you so much
You're welcome. Yes, you've interpreted it correctly.
Thanks
thanks a lot sir.
You're welcome!
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