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This is not complete question just a part:
At 1st nov 2009 the company issue bonus shares by 1 for 4 shares held.
EPs for 2008 $1.5
Required : restate basic eps for the yr 2008ans :1.5 X 1 divide 1.25 = $1.2 My Quesiton is what 1 is representing here???
Please ans as soon as possible
there is a bonus factor here.
Bonus factor for the current year is number of shares after issued devided by number of shares before issued which is 5/4.for the restated EPS of the previous year it would be the recipocal of 5/4 which is 4/5 or in your case you get 5/4 = 1.25 and use the bonus factor of 1 devided by 1.25.
you can use either 1 / 1.25
or times it by 4/5
the result would be exactly the same.I hope that helps.
Thanks Ratna for your immediate reply, i understood what you explained in your reply.
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