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# Diluted EPS: Given data, calculate diluted earnings per share

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Net profit for the year \$18,160,000
Ordinary shares of \$1: \$40,000,000
Number of ordinary shares in issure : 40,000,000
Average fair value of one ordinary share during the year : \$1.5
Number of shares under options during the year : 2,000,000
Exercise price for shares under options during the year : \$1.2

Calculation for above :
Earnings / Shares / EPS
Basic EPS \$18,160,000 / 40,000,000 / 0.454

(2,000,000 x 1.2 / 1.5 = 1,600,000) 400,000
Diluted EPS \$18,160,000 / 40,400,000 / 0.450

If the company issued \$20 m of 6% convertible loan stock on 1 May 2008, the terms of conversion of the loan stock per \$200 nominal value of loan stock were:

Conversion date / number of shares :
31 May 2010 / 23
31 May 2011 / 22
31 May 2012 / 21
No loan stock has yet been converted.

Calculate diluted earnings per share.