ABC company has a complex capital structure. For the year ended 31 December 2007, the company had:

a) 64,000,000 ordinary shares of $1 each.

b) 2,400,000 convertible prefrence shares with a par value of $10 each, which pay a preference dividend of $0.8 per share and convert at a rate of five ordinary shares for each preference share outstanding.

c) 42,000,000 7.5% converitble bonds which convert at a rate of five ordinary shares for
each $7 of debt outstanding.

d) A net profit of $8,000,000.

The following details relate to teh capital of the company.

a) On Jan 1 2007, 3,420,000 warrants to subscribe one ordinary share of $1 each with an
exercise price of $5.30 per share were issued. No warrants were exercised up to the year end date.

b) The average price of the ordinary shares for the year was $6.

The tax rate id 17.5%.

Calculate the basic earnign per share and diluted earning per share for ABC company EPS
for 2007.Show the workings.

You have a go !!
You show the workings !!

We shall endeavour to correct your work
for you.
You must put in your effort first.

You have a go !!
You show the workings !!

We shall endeavour to correct your work
for you.
You must put in your effort first.

well i tried to solve it ...but couldnt find the weighted average number of share outstanding...could u please help me with this....

You need to show us how you tried to solve it.

something like this:-

a) 64,000,000-----------------------64,000,000
b) 2,400,000 times 5---------------12,000,000
c) 42,000,000/7 6,000,000 * 5---- 30,000,000

total equivalent---------------------106,000,000

Net Profit before tax------------------8,000,000
Net Profit after tax 82.5% of N.P.---6,600,000

You can take it from here !!

how do I calculate price per share

You now have the necessary ingredients.

Divide the Net Profit by the Total Number
of Equivalent Shares.

how do I calculate price per share

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