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- May 24, 2015 at 6:45 pm #248565
Dear Mike would you please help me about this question many thanks firstly
The issued share capital of Savoir, a publicly listed company, at 31 March 2005 was $10million. its shares are denominated at 25 cent each.
On 1 April 2005 Savoir issued $20 million 8% convertible loan stock at par. the terms of conversion (on 1 April 2008) are that for every $100 of loan stock, 50 ordinary shares will be issued at the option of loan stockholders. Alternatively the loan stock will be redeemed at bar for cash. Also on 1April 2005 the directors of Savoir were awarded share options on 12 million ordinary shares exercisable from 1April 2008 at $1.5per share. The average market value of Savoir’s ordinary shares for the year ended 31 March 2006 was $2.5 each. The income tax rate is 25%. Earning attributable to ordinary shareholders for the year ended 31 March 2006 were $25200000. The share options have correctly recorded in the financial statements.
required :
Calculate Savoir’s basic and diluted earnings per share for the year ended 31 March 2006.
you may assume that both the convertible loan stock and the directors’ options are dilutive.May 24, 2015 at 6:48 pm #248571my main issue is the calculation of share the answer is 84m, but I did is 40m (10m/0.25), I don’t know why
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