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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

    Additional shares (2,000,000 - 1,600,000)
    (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.

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    https://brainmass.com/business/accounting/diluted-eps-given-data-calculate-diluted-earnings-per-share-327232

    Solution Summary

    The expert examines diluted EPS. The given data and the calculated diluted earnings per share are determined.

    $2.19

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