Lecture Topic 4(1) - Corporate Financial Reporting and...

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Corporate Financial Reporting and Analysis (ACCT2542) Quiz #3 – Earnings per share (with solution) Part A Mary Ltd has a profit after tax of $10, 120, 000 for the period ended 30 June 2005. Mary Ltd also has $10,000,000 of 5 per cent cumulative preference shares issued on 1 July 2002. These shares are convertible to 2,000,000 shares at the option of the holder on 30 June 2007. As at 1 July 2004 and 30 June 2005 there were 6,000,000 fully paid ordinary shares issued. Mary Ltd also has $6,000,000 in convertible debentures issued for the full year. It pays interest of 6% per cent per annum and could be converted to 1,500,000 ordinary shares at the option of the debenture-holders. The tax rate is 30 per cent. There are also 900 000 share options currently on issue with an exercise price of $4.50. The average share price for ordinary shares during the year was $4.90. Required: Calculate earnings per share for Mary Ltd required to be presented on the face of the income statement for the year ending 30 June 2005, as required in AASB
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This note was uploaded on 01/31/2012 for the course ACCT 2542 taught by Professor Knapp during the Three '11 term at University of New South Wales.

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Lecture Topic 4(1) - Corporate Financial Reporting and...

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