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Given below is the extract of statement of profit or loss of Ayer Bhd, a listed
company.
Profit form the year ended 30 June x5
RM
Profit before taxation 700,000
Taxation 30% (200,000)
500,000
Dividends paid ordinary shares 100,000
- preference shares 35,000
The following information is also provided:
a. Issued share capital on 1 July x4 comprises 2 million ordinary
shares and RM500,000 7% preference shares.
b. On 1 July x4, RM500,000 10% convertible debentures (convertible
into 200 ordinary shares per RM100 debenture) were outstanding.
c. Changes in capital structure during the year ended 30 June x5 are
as follows:
a. On 1 October x4, a rights issue of ordinary shares on a one-for-four
basis at 80 sen (market price before the issue was RM1) was made.
b. The basic EPS for the year ended 30 June x4 was 18 sen.
d. Tax rate is 30%.
Required:
a. Compute the companys basic EPS for the current year and
comparative figure for the previous year.
b. Compute the diluted EPS for the current year.
(a)
= 465,000
2,395,833
Theoretical ex-right price
(2mil x RM1) + (0.5mil x RM0.80)= RM2.4mil
2.4mil / 2.5mil = 0.96
or
Number of share x Price per share (RM) = Total (RM)
4 1 4
1 0.80 0.80
5 4.8
RM4.8 5 = RM0.96
Restate EPS x4 18 sen x 0.96 = 17.3 sen
1
X6 X5
RM000 RM000
Profit before taxation 500 450