Jayzee Ltd. is authorized to issue 2,000,000 $5 par value ordinary shares. As at 31st December 2014, the company had 1,500,000 ordinary shares issued and 1,200,000 ordinary shares outstanding. As at 31st December 2014, the company had 500,000 convertible preference shares issued with a par value of $10 each. These shares are convertible into ordinary shares at the rate of one convertible preference share to two ordinary shares. The company’s Net Income was $10,000,000 for the year 2015. The following transactions took place during 2015 – On 1st July 2015, the company converted 200,000 preference shares into ordinary shares. On 01st October 2015, the company repurchased 100,000 of its ordinary shares for $8.00 per share. Dividends on the preference shares for 2015 were paid on 31st March, 30th June, 30th September and 31st December 2015 at 50 cents per share each quarter. Required: 1. Calculate Basic Earnings per share for the year 2015. 2. Calculate Diluted Earnings per share for the year 2015.
Jayzee Ltd. is authorized to issue 2,000,000 $5 par value ordinary shares. As at 31st December 2014, the
company had 1,500,000 ordinary shares issued and 1,200,000 ordinary shares outstanding.
As at 31st December 2014, the company had 500,000 convertible preference shares issued with a par value of
$10 each. These shares are convertible into ordinary shares at the rate of one convertible
two ordinary shares.
The company’s Net Income was $10,000,000 for the year 2015.
The following transactions took place during 2015 –
On 1st July 2015, the company converted 200,000 preference shares into ordinary shares.
On 01st October 2015, the company repurchased 100,000 of its ordinary shares for $8.00 per share.
Dividends on the preference shares for 2015 were paid on 31st March, 30th June, 30th September and 31st
December 2015 at 50 cents per share each quarter.
Required:
1. Calculate Basic Earnings per share for the year 2015.
2. Calculate Diluted Earnings per share for the year 2015.
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