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hi sir,
say u have 500 o.shares nv £1, a rights issue for every 1 held= 2 rights issue…ur number of right shares=1000,ur total shares nw therefore is 1500 nw…then wen u do the procedure for RI, terp n all ur weighted avg turns out to be 1010 shares…then the 2nd part of the same question for that year..ask u to cal diluted eps…my issue is which figure of shares to use 1500 or weighted average of 1010…all the questions i have gone through eg radan plc n niagra i have used the weighted avg figure to follow on n it was rgt but a question quite annoyg called savoir used the 1500 figure instead of the weighted av 1010 to follow on to calculate deps…ps those figs r fictious to make u understd my issue…was that a mistake in savoir question plz?coz its nt consistent with all the other questionsThe answer would be correct if the rights issue had taken place on the first day of the accounting period. Can you check the date? Otherwise, you would take the weighted average number of shares as your start point in the deps calculation
Hope that helps
i just checked the question, it is the covertible loan notes that was issued on the 1st day of the accountg period…..hmmm
sorry about that..hmm meant i was thinkg and mullg over what you said and now i just reworked the question and got wat u said..thank u:)loads…
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I need a little clearing up on eps how you u treat the new shares when its a rights and a bonus
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