{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

AFA_Lec_34 - Advanced Financial Accounting Lecture-34...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Advanced Financial Accounting Lecture-34 Earnings Per Share
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Question-1 On 30 September 2002, B & Co. made an issue at full market price of 1,000,000 ordinary shares. The company’s accounting year runs from 1 Jan. to 31 Dec. Relevant information for 2001 and 2002 is as follow: 2001 2002 Shares issue at 31 Dec. 8,000,000 9,000,000 Profit after tax 3,280,000 3,300,000 Required: Calculate EPS for 2001 and 2002.
Image of page 2
Solution Weighted average number of shares 2001 8,000,000 2002 Already issued 8,000,000 30 Sep. 2002 Fresh shares issued (1,000,000 x 3/12) 250,000 8,250,000
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Solution EPS = Earnings available for ordinary shareholders Weighted average No. of ordinary shares outstanding during the year EPS (2001) = 3,280,000 / 8,000,000 = Rs. 0.41 per share EPS (2002) = 3,300,000 / 8,250,000 = Rs. 0.40 per share
Image of page 4
Bonus Share
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Question-2 2008 2009 Earnings / Profit Rs. 75,000 Rs. 80,000 Share at 1 Jan. 400,000 400,000 Bonus issue 100,000 100,000 Total shares 500,000 500,000 At 30 Sep. 2002 company made 100,000 shares as bonus issue. Required: Calculate EPS for 2008 and 2009
Image of page 6
Solution EPS (2008) = 75,000 / 500,000 = Rs. 0.15 per share EPS (2009) = 80,000 / 500,000 = Rs. 0.16 per share
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Right Issue
Image of page 8
Question-3 A company has 10,000 shares in issue. It now proposes to make 1 for 4 shares rights issue at a price Rs. 3 per share. The market value of existing share is Rs. 5 per share.
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern