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In example 1 chapter 21, in the Rights fraction, where does the 4 in the”value column come from and also the 6,250,000 in the “number column” under basic EPS calculation.Please help
Namatama , Zambia
If the “4” in the value column (I’m struggling here without access to the notes) is in either of the top two lines of the rights fraction calculation, then the figure is given in the question.
If it’s in the third, last line, then it’s the total invested divided by the newly increased share holding.
Does that do it for you?
Yes and Thanx a lot.
question no2.
Larisa had earnings of $600,000 for the year ended 28 February 2009 and 2000,000 $1 equity share capital at 1 march ,2008. On 31 August , Larisa issued 3,000,000 new shares at full market price and on 1 November 2008, Larisa made a bonus issue of 2 new shares for every 7 last year’s EPS was disclosed as 16 c
calculate the basic EPS for Larisa for the year ended 28 February ,2009 and restate the comparative EPSsolution.
DATE NUMBER PERIOD FRACTION WANES
01.03.08 2,000,000 6/12 9/7 1,285,714
31.08.08 5,000,000 2/12 9/7 1,071,428
1.11.08 6,428,571 4/12 2,142,857In this table, where do the figures 9/7 come from. for that fraction in my calculations i got 1/1.please help and give me further information on the fraction.
Regards9/7 is the bonus fraction – number of shares AFTER the bonus divided by number of shares BEFORE the bonus
Ok?
Yes i have got it .Thanx.is the bonus fraction different from the rights fraction?
Regards.
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