Compute the basic earnings per share

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Reference no: EM132927422

Question - The issued and fully paid share capital of a company on 31.12.01 was:

400,000 7% preference shares of Sh.1 per share

4,000,000 ordinary shares of Sh.1 per share

The post-tax net profit for the year ended 31.12.01 was Sh. 372,000

On 1st October 1999, the company had issued Sh.1.2. m 6% convertible loan stock, 2002/2005 convertible per Sh 100 of loan stock into ordinary shares of Shs. 1 per share as follows:

30th September 2002 120

30th September 2003 115

30th September 2004 110

30th September 2005 108

The tax rate for 2001 was 35%.

Required -

1. Compute the basic earnings per share.

2. Diluted earnings per share.

Reference no: EM132927422

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