A company reports the following in relation to the year ended 30/6/2012:
Number of ordinary shares issued at 1/7/2011 $\quad10 000$
Number of preference shares issued
(paying an annual dividend of $\$ 2.00$ per share) $\quad1800$
On $31 / 3 / 2012$ a further 1000 ordinary shares were issued.
Net profit from ordinary activities, after income tax $\quad \$ 20000$
The company's basic earnings per share figure (to the nearest tenth of a cent)is:
A) $1.95
B) $1.67
C) $2.00
D) $1.79

Question

Quizplus · Accepted Answer

The weighted average number of ordinary shares is calculated as follows: 10,000 shares for 9 months and 11,000 shares for 3 months, resulting in 10,250 shares. The net profit attributable to ordinary shareholders is $20,000. Basic EPS = $20,000 / 10,250 = $1.95, but since the options are rounded to the nearest tenth of a cent, the closest option is $1.79.

A Company Reports the Following in Relation to the Year 10000\quad10 00010000

A Company Reports the Following in Relation to the Year $\quad10 000$