Earnings Per Share - IAS 33

Question 1

Basic EPS

Answer 1

Earnings / Shares

PAT - NCI - Irredeemable Pref shares / Weighted average no. shares

Presented in $ and to one decimal place.

Question 2

PE Ratio

Answer 2

Current Share Price / Latest EPS = Markets view of the company’s future.

• Attributable to ordinary equity holders

Question 3

Full Market Issue

Answer 3

Requires a weighted average table

Date - Actual Nr. Share - Fraction of Year - Bonus Fraction - Total

Question 4

Bonus Issue

Answer 4

No cash generated no table required, assume takes place from day 1

Question 5

Rights Issue

Answer 5

Combines full market and bonus

-weighted average table required.
-Free shares to be determined by calculating ex-rights price (share price after rights issue)
-apply rights issue bonus fraction to the shares in issue before the rights in the weighted average table.

Actual cum right price / Theoretical ex-rights price

Question 6

Diluted EPS (DEPS), two types?

Answer 6

Convertible:

Show the potential impact of conversion. i.e Interest payment would be saved and the share capital would increase.

Options:

Show the potential impact of the issue of future shares at a pre-determined price. = Difference between Nr. Shares actually purchased and count that could be bought at FV - Free shares