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What is the weighted average number of shares outstanding

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Reference no: EM132745339

Question - For the year ended 31 December 2020 HKU Company had:

Net income for the year of $18,120,000

9,500,000 ordinary shares outstanding at the beginning of 2020

420,000 outstanding cumulative and convertible preference shares which pay a preference dividend of $1.1 per share and convert at a rate of 4 ordinary shares for each 1 preference share outstanding

350,000 options were issued on July 1, 2020 with an exercise price of $3.75. The outstanding period is from the issuance date to Dec 31, 2020.

The company issued 720,000 ordinary shares on Sep 1, 2020.

Ordinary share market prices for 2020 were as follows:

Average for first 1/2 of year $3.85

Average for second 1/2 of year $3.55

Average for the year $3.65

Tax rate is 20%

Required -

1. What is the weighted average number of shares outstanding in 2020?

2. What is the basic EPS in 2020?

3. Is the option issued on July 1, 2020 dilutive or anti-dilutive?

4. What is the weighted average number of shares outstanding in 2020 when we calculate diluted EPS?

5. What is the diluted EPS in 2020?

Reference no: EM132745339

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