XYZ Ltd is
finalising the calculation of its basic earnings per share. The
entity has a profit before tax of $20,000,000 and a profit after
tax of $14,000,000. It paid a dividend of $1000,000 to preference
shareholders out of this profit. The preference shares are
classified as equity.
XYZ Ltd provides the following
details:
- At 1 July 2019 XYZ Ltd had a total of 5,000,000 ordinary shares
on issue.
- On 1st September 2019, XYZ Ltd issued a further fully paid
shares on the basis of a one-for-four (1:4) rights issue at a price
of $3.50 per share. The share price immediately prior to the rights
issue was $5.10. All shareholders took up the rights issue.
- The basic EPS for the year ending 30 June 2019 was 245
cents.
Required
- Calculate the theoretical ex-right price and adjustment
factor.
- Compute the basic Earnings per Share (EPS) amount in cents for
30th June 2020.
- Compute the adjusted comparative EPS for year ended 30th June
2019