Chpt 17 - EPS Flashcards
1
Q
EPS
A
= Earnings / no. of shares x100%
2
Q
Bonus Issue - Bonus Fraction
A
= no. new shares/ no. old shares
3
Q
Rights issue - Bonus fraction
A
= FV per share before exercise of rights / TERP
= Old SP/New SP
4
Q
Share Options
A
1) Cash receivable (no options x exercise price)
2) No shares is bought at Market price = (1)/MP
3) Deduct (2) from actual no. shares issued
4) Add these ‘free shares’ to WACC
5
Q
Diluted EPS
A
= Adj earning / adj no shares x 100%
6
Q
Adj Earnings
A
= PAT + (interest saved after tax = no. convertible loan x % convertible loan x(1-t))
7
Q
Adj no shares
A
= No original shares + (loan amount x (eq share basis/ $loan note))
