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Hi sir for september 20116 exam , question 32 part (a), observation (2).
In the answer key, it’s stated that ” the 6 million new shares were only in issue for six months and should be weighted by 6/12. Thus, the correct EPS for 20X6 is 13·3 cents (5,700/43,000 x 100).
i just want to check with you on how to derive the 43 000.
EPS
= Earnings / Number of shares in issue
= { 5700 / [( 46000 + 40000 ) x 6/12] } x 100
= 13.3 centsAm i correct sir ?
There are 46,000 shares in issue as at the end of the year
Of these 6,000 were issued during the year
so 40,000 were in issue for the entire year and …
… 6,000 in issue for only half a year
And 6,000 for half a year is the equivalent of 3,000 for a full year
Thus we have 40,000 original shares + the 3,000 equivalent shares = 43,000
OK?
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