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Profit after tax
year ended 31 dec2015-$40000
year ended 31 dem2016-$50000Equity share capital (before rights issue)—-$200,000(shares of 50 cents each)
On 1 october 2016 a rights issue of 1 for 4 at $3 per share was madeThe price quoted on the last cim rights was $3.60
Before issue of 4 shares at 3.60=14.4
After issue of 1 share at 3=3
Theoretical ex-price 17.4/5=3.48Right issue shares 200000*1/4=50000
200000*9/12*3.60/3.48=155173
250000*3/12=125000
overall625000
Eps=50000/625000=0,23My main question sometimes we multiply shares with its par value but why in this case not?
My question why i do not multiply it like 200000/0.50=400000right issue shares 400000*1/4=100000
for instance in another convertible debt example shares in issue throughout $100000 ordinary shares of 25 cents each
100000/0,25=400000-we firstly multiply it then starting calculate but why it is not acceptable in the above case?If it’s $200,000 worth of 50 cent shares, that’s 400,000 shares
If it’s 200,000 50 cent shares, that’s 200,000 shares
What’s the name of the question – I want to check to see that you have typed it correctly!
I typed it correctly but then i saw that it is wrong.it should be 400000 because as i mention eps is considered per share not share value.
Becker study question bank to June 2017 Earning per share and exercise number 65.it is just called earning per share.let me say its page number 52
“I typed it correctly but then i saw that it is wrong”
I’m speechless
Again, let me tell you that I do not have any of this material that you insist on telling me about
I really don’t care if it’s a Becker study text question on page 937 of volume 3, 2nd edition!
And if it’s a question from a study text, it’s not likely going to be on the internet
I DON’T HAVE THAT MATERIAL!
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