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Hi,
I have a problem regarding EPS.
Plumstead had 4 million shares throughout year ended 31.03.2017.
On 30.09.2017 mde 1 for 4 bonus issue. Profit after tax for 31.03.2018 was 3.6 million $, out of which an equity dividend of 20c per share was paid.
The financial statements for 31.12.2017 swoed an EPS of 0.70 $What is the EPS for 31.03.2018 and restated EPS for 31.03.2017
I calculated EPS for 2018 but I do not know exactly how to calculate restated EPS for 2017.
Thank you in advance for an asnwer
From page 117 of the free course notes we have:
“the rule to apply is:
• multiply all prior periods this year by the BONUS FRACTION, and
• multiply last year’s disclosed EPS by the reciprocal of the bonus fraction”The reciprocal of the bonus fraction is the bonus fraction turned upside down
So if the bonus fraction is, for example, 4/3 then the reciprocal is 3/4
So, as above, IF the bonus fraction and its reciprocal had been 4/3 and 3/4 respectively, the “last year’s restated earnings per share” would have been 70 * 3/4 which would equal 52.5 cents per share
Now you do it using the correct bonus fraction and the correct reciprocal
OK?
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