Reference no: EM132857278

Question - Company BETA has both ordinary shares and equity-classified preference shares in issue. The number of shares during year 20X8 is presented below Number of ordinary shares at the beginning of the year 5 000 000 Number of treasury shares at the beginning of the year 600 000 Number of preference shares at the beginning of the year 400 000 In 20X8 BETA made following operations on shares:

1) 31 Jan 20X8 BETA made bonus issue at rate 10%, which means that 1 new ordinary share was issued for each 10 ordinary shares (both outstanding and treasury). Shares were issued for no cash.

2) 1 Mar BETA repurchased 200 000 of ordinary shares for cash.

3) 1 Jul BETA issued 400 000 ordinary shares for cash.

Additional information:

1) Net profit from total operations in 20X8 amounted to 8 800 000 EUR, where profit from continuing operations was 9 500 000 EUR, while on discontinued operation BETA made loss 700 000 EUR.

2) In 20X8 BETA declared non-cumulative dividend on preference shares of 1,50 EUR per share. Non-cumulative dividends on preference shares are tax deductible. Income tax rate is 20%.

3) Preference shares are convertible into ordinary shares at ratio 2,00 ordinary shares for 1 preference share. After bonus issue, conversion 6 rate was increased to 2,20 ordinary shares (by 10%) per 1 preference share.

4) At the beginning of the year BETA has 450 000 contingently issuable shares, which are issuable for no consideration to former owners at the end of year 20X9 if market price of share that day would be above 40 EUR. Amount of contingently issuable shares was adjusted (increased) by bonus rate (10%) on 31 Jan 20X8.

Required - Calculate Basic and Diluted EPS for both total operations and continuing operations.