Homework Answers
Calculation of EPS for the year 2020
EPS = Earnings available for equity shareholders/ total number of shares outstanding during the year
EPS = 543800(WN-1)/376583(WN-2)
EPS = 1.44
Working note 1: Earnings available for equity shareholders
Total earnings 99000+685000 = 784000
Less: tax rate @30% (235200)
Total earnings (after tax). 548800
Less: Dividend to Preference shareholder
(@5% on 100000). (5000)
Earnings available to equity shareholders. 543800
Working note 2 : Total no. Of shares outstanding during the year
| Types of shares | no of shares | outstanding for the period | total no. of shares outstanding during the year | |
| Preference shares | 201000 | 12months | 201000*12/12 | 201000 |
| Common shares | 10000 | 12months | 10000*12/12 | 10000 |
| Additional common shares | ||||
|
- Company A -Company B -Company C |
164000 83000 59000 |
8 months 6months 3months |
164000*8/12 83000*6/12 59000*3/12 |
109333 41500 14750 |
Total no. of shares outstanding= 10000+ 201000+ 109333+ 41500+ 14750 = 376583.
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