Reference no: EM132452816

Problem - Young Ltd has a profit after tax and extraordinary items of $6,630,000 for the period ended 30 June 2015. Young Ltd has $1,000,000 of 10 per cent cumulative preference shares. The dividends on the preference shares are not treated as expenses in the statement of financial performance. There are no dividends in arrears.

As at 1 July 2014 there were 3,000,000 fully paid ordinary shares on issue. Young Ltd also has $1,500,000 in convertible debentures issued for the full year. Their interest rate is 5 per cent per annum. The debentures will be mandatorily converted to 300,000 ordinary shares on 1 July 2017. There are also 100 000 share options currently on issue with an exercise price of $1.30. The average market price for ordinary shares during the year was $1.25, and that is the price at year-end. The tax rate is 30 per cent.

Required - What is the diluted EPS for Young Ltd in accordance with AASB 133 ("Earnings per share")?

a) $2.25

b) $1.94

c) $2.18

d) $1.99

e) $2.20