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Thank you sir , I think your prefer way doing is far far better and Simple but sir in the very example 1 how did we arrive at 6,250,000 at the date of 1.8.09?
Svetlana had in issue 1.1.2009 , 5,000,000 $1 Equity shares. On 1 August , 2009 Svetlana made a 1 for 4 rights issue at an exercise price of $3. The mid market price immediately before the rights issue was $4.
Earnings for the year available to equity shareholders was $3,000,000 and 2008 disclosed EPS was 54c.
If we start with 5,000,000 and we have a 1 for 4 rights issue, how many shares are involved in the rights issue?
5,000,000 / 4 * 1 = 1,250,000
But we already had 5,000,000 in issue so, with this additional 1,250,000 we now have 6,250,000
OK?