1. Mann Ltd determines profit attributable to ordinary shareholders for the reporting period ended 30 June 2023 as $800 000. The company has calculated its weighted average number of ordinary shares on issue during the period as 400 000. The weighted average number of shares under share options arrangements during the period is 10 000.The average market price of the entity’s shares during the period is $2.50 per share, and the exercise price of shares under option is $0.95.
Required: What is the diluted earnings per share for the year ended 30 June 2020 (keep three decimal places)?Show all your workings.
Calculation of the Number of share in stock options :-
Share options * (Market price of share - option price ) / Market price of share = Number of shares involve in stock options
10,000 * ( 2.50 - 0.95) / 2.5 = Number of shares involve in stock options
Number of shares involve in stock options = 6,200 shares
Potential diluted shares = 6,200 shares
Diluted EPS = (Net income Available to shareholders) / ( Weighted Average number of ordinary shares + Potential Diluted shares)
= $ 800,000 / ( 400,000 + 6,200)
= $ 800,000 / 406,200 shares
Diluted EPS = $ 1.96947 per share
Get Answers For Free
Most questions answered within 1 hours.