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EPS

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › EPS

Viewing 2 posts - 1 through 2 (of 2 total)
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  • February 12, 2017 at 3:09 pm #372089
    mmensah
    Member
    • Topics: 39
    • Replies: 43
    • ☆☆

    Hi Sir.

    I understand why a rights issue will cause EPS to fall.. because we now have more shares for the same earnings… but why would this cause a reduction in dividend? Will the shareholders not get more dividend now they own more shares?

    thanks

    February 12, 2017 at 4:15 pm #372099
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54798
    • ☆☆☆☆☆

    The rights issue itself will not affect the total dividend that the company pays.

    With more shares in issue it will mean therefore a lower dividend per share.

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