Help required. Will be extremely thankful.

This topic has 6 replies, 2 voices, and was last updated 6 years ago by MikeLittle.

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April 24, 2016 at 9:59 pm #312549
zohaib03
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Hi Mike. I’m having a little difficulty in example 3 chapter 21.

S had in issue 4,000,000 $1 equity shares throughout the year ended 31 Dec 2009, with an average mid-market price of $5. There were also 3,000,000 outstanding options, which had been granted to the directors, allowing them to exercise their option at $4 per share.
Earnings for the year ended 31 Dec 2009 available for equity were $2,800,000.
Calculate the basic and diluted EPS for S for the year ended 31 Dec 2009.

I understood everything except for how did we get the 2,400,000 figure in the diluted working. Can you please guide me with this? I’ll be really thankful to you. =)
April 25, 2016 at 7:07 am #312586
MikeLittle
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3 million @ $4 per option raises $12 million

If the company had wished to raise $12 million during the year, they could have issued 2,400,000 shares @ $5 each

Is that enough for you (This is all in the lecture and clearly written in the notes!)
April 25, 2016 at 6:33 pm #312649
zohaib03
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Yes Mike Thnaks alot. This was my guess too =)
But Mike there are no lectures for chapters 20 21 and 22.
April 25, 2016 at 7:02 pm #312657
MikeLittle
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I believe that there’s an earnings per share lecture on the P2 suite that would help

There simply was not enough time for me to record the full syllabus but I’ll be doing some more recording this next month.

Too late for you though – sorry
April 25, 2016 at 8:22 pm #312662
zohaib03
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Okay Mike I’ll look for P2 lectures. But you guys are great! Simply great !! I really appreciate your whole team and all your efforts =)
April 25, 2016 at 8:23 pm #312664
zohaib03
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But i’m sitting in the June session so i might be lucky to here your lectures before my exam.
April 26, 2016 at 6:57 am #312684
MikeLittle
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It takes time to plan, set up the recording facility, send to Admin (who already works full time on the site), find time for him to upload …..

It’s unlikely to be ready for June!
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