Below is the question and ans for EPS calculation from kaplan, now how there is a bonus fraction calculated when the haven't given the older share price and new share price?
An entity had 1 million shares in issue on 1 January 20X1. They issued 200,000 shares at market value on 1 April 20X1, followed by a 1 for 5 bonus issue on 1 August 20X1, with a further 300,000 issued at market value on 1 October 20X1. If profit for the year ending 31 December 20X1 is $220,000, what is the basic earnings per share?
Ans: Date Number of shares/ Bonus fraction/ Fraction of year/ Total
1 Jan b/f 1,000,000 6/5 3/12 300,000 Issue
200,000 –––––––– 1 Apr b/f 1,200,000 6/5 4/12 480,000
1 for 5 bonus 240,000 –––––––– 1 Aug b/f 1,440,000 2/12 240,000 Issue
300,000
–––––––– 1 Oct b/f 1,740,000 3/12 435,000
–––––––– –––––––– Number of shares in EPS calculation 1,455,000
–––––––– \
The earnings per share for 20X1 would now be calculated as: $220,0001,455,000= 15.1¢