lps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginningof the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 AlpsLtd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last saleprice of an ordinary share before the bonus issue was $2.50. At the beginning of the current periodAlps Ltd also had 500 000, $1.00, 8% cumulative preference shares on issue. The dividends on thepreference shares are not treated as expenses in the statement of comprehensive income. The basicearnings per share for the period ended 30 June 2018 was $1.50 per share.Required:a) Calculate the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018. b) Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS.
lps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginning
of the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps
Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March
2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of
price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period
Alps Ltd also had 500 000, $1.00, 8% cumulative
preference shares are not treated as expenses in the statement of comprehensive income. The basic
earnings per share for the period ended 30 June 2018 was $1.50 per share.
Required:
a) Calculate the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018.
b) Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS.
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