Question

Аавьсар Аавьсах АавьсаАавьсс Аав Аавьса 1 No Spaci... Heading 1 Heading 2 Aa 1 Normal Title Subtitle Font Paragraph Styles 203 104 SIRGTILIZERS 10 1-11 1. 12. 1.13 14 151 8. X Ltd has earnings for the year ending 30 June 2019 of $410 milion. Outstanding ordinary shares as at 1 July 2018 were 100 milion fully paid ordinary shares During the year the company issued 15 million party paid shares. The information relating to the issue is shown below Issue price $200 Paid $0.50 Closing date 31 May 2013 REQUIRED Calculate the basic earnings per share for the year ending 30 June 2019 LO 241 242

Answer 1

The Basic Earnings per share is computed using the formula- Net Profit attributable to equity shareholders' / Weighted Average no. of equity shares When there is partly paid up shares issued during the year, the weighted average no. of shares should be computed in the ratio of paid up price to the issue price. In the given case, Shares Paid up ratio No. of months Weighted Average 100 mill 100% 12 millions 100 (100*100%*12/12) 0.3125 (15*25%*1/12) 100.3125 15 mill 25% 1 (0.50/2.00) Weighted Average no. of equity shares millions millions Net Profit attributable to equity shareholders' = $ 410 millions Basic EPS = 410/100.3125 = $ 4.09