Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10% convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 of loan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were £32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock is dilutive. Calculate company X’s diluted EPS for the year ended 30th June 20X6

Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10% convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 of loan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were £32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock is dilutive. Calculate company X’s diluted EPS for the year ended 30th June 20X6

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10% convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 of loan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were £32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock is dilutive. Calculate company X's diluted EPS for the year ended 30th June 20X6.
At 31 December 2021 Wyndhams calculated its basic earnings per share as 30 pence per share, based on earnings of £900,000 and 3 million £1 ordinary shares. It has a tax rate of 25%. In addition to the ordinary shares, Wyndham has £3m of 4% convertible loan stock. This is convertible any time from 1 January 2021 – 31 December 2022 at a rate of 1 ordinary share for each £5 of loan stock. None had been converted by the year end. a) Calculate the diluted EPS for year ended 31 December 2021. Answer to one decimal place Wyndhams issued £2m 8% convertible preference shares on 1 January 2021, convertible between January 2024 and January 2025 at a rate of 1 ordinary share per £5 of preference shares. b) Combine the information on the convertible loan stock and the convertible preference shares to calculate the diluted EPS for year ended 31 December 2021. Answer to one decimal place
On 1 June 2021, Double Tree Bhd. Issues RM7 million 7% redeemable preference shares at RM1 each, redeemable at a premium of 10% on 31 May 2024. Dividend is payable on paid-up capital. The effective interest rate is 9.3 % and the interest is due on 31 May every year. Required: Show the extracts from the statements of profit or loss and the statements of financial position for the year 31 May 2021, where the redeemable preference share is measured at amortised cost
XYZ plc had an issued share capital of 1 million ordinary shares at 1 January 2020. The nominal value was 50p and the market value £2 per share. On 30 June 2020, the company offered a 1:2 rights issue (e.g., one new share for every two shares held) at a price of 100p per share. The post-tax earnings were £3m and £4m for 2019 and 2020, respectively. Required: a) Calculate the basic EPS for XYZ plc 31 December 2020, in accordance with best accounting practice. b) What is the bonus element for shareholders?
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ABC Ltd is preparing its statement of changes in equity for the year ended 31 December 20X8. The opening share capital balance in the statement of changes in equity was £50,000, comprising 50,000 £1 equity shares which were issued at a premium of £0.25 per share. The following balances and transactions arose in the year: (1) ABC Ltd issued 10,000 £1 equity shares at price of £0.85 per share on 1 July 20X8; (2) ABC Ltd made a bonus issue on 1 October 20X8 of 5,000 £1 equity shares utilising retained earnings; (3) It paid a dividend totalling of 10p per share to all shareholders on 31 December 20X8. What was the closing balance of share capital in the statement of changes in equity at 31 December 20X8?
At 1 January 20X9, company X had in issue 10 million ordinary shares. On 30 April 20X9, company Xmade a 2 for 5 rights issue at £1.20 per share. At that date the share price (before the issue wasannounced) was £1.60 per share. The earnings of the company were £3m for 20X9.Calculate the basic EPS for 20X9.
accenture company had made a net profit attributable to ordinary shareholders of 2,000,000 for the year ended December 31,2019.there are 100,000 ordinary shares outstanding during the entire year.since January 2019 there had been 800,000 of 5% convertible loan in issue. the terms of conversion for every 10,000 nominal amount are:June 30 2019 120 ordinary sharesJune 30, 2020 150, ordinary sharesJune 30,2021 140 ordinary sharesNo conversion has taken place during the current year. the interest on the convertible loan is allowable for a tax relief of 30%.REQUIRED:1. basic earnings per share 2. diluted earnings per share
Compaq Ltd has a net income after tax of $2 000 000 for the year ended 30 June 2018. At the beginning of the period Compaq Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 January 2018 Compaq Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2018 Compaq Ltd made a one-for-five bonus issue of ordinary shares out of retained earnings. The last sale price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period Compaq Ltd also had 500 000, $1.00, 5% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. The basic earnings per share for the period ended 30 June 2017 was $1.50 per share. Required:Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS
Compaq Ltd has a net income after tax of $2 000 000 for the year ended 30 June 2018. At the beginning of the period Compaq Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 January 2018 Compaq Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2018 Compaq Ltd made a one-for-five bonus issue of ordinary shares out of retained earnings. The last sale price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period Compaq Ltd also had 500 000, $1.00, 5% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. The basic earnings per share for the period ended 30 June 2017 was $1.50 per share.Calculate the basic EPS amount for 2018.