Earnings per Share

Question 1

Earnings per Share applies to what type of share only?

Answer 1

ordinary shares outstanding

Question 2

Earnings per Share is required for what type of company only?

Answer 2

public entities

non public → only encouraged

Question 3

Formula - BEPS

Answer 3

NI - Preference Dividends +/- Gain or Loss from Redemption
———————————–
WAOSO

Question 4

Consideration for Preference Dividends (BEPS Formula)

Answer 4

whether cumulative or non cumulative

Question 5

How to say it is a Gain from Redemption of Preference Share?

Answer 5

CA of Preference > Redemption Price

Question 6

In case of share split and share dividend…

Answer 6

retrospective application

Question 7

Formula - DEPS (Convertible Bonds Payable)

Answer 7

NI - Preference Dividends + After Tax Interest Expense
———————————–
WAOSO + Additional Shares

Question 8

Formula - DEPS (Convertible Preference Shares)

Answer 8

NI - Preference Dividends + Preference Dividend
———————————–
WAOSO + Additional Shares

Question 9

Formula - DEPS (Options and Warrants)

Answer 9

NI - Preference Dividends
———————————–
WAOSO + Additional Shares

Question 10

Consideration for Options and Warrants

Treasury Share Method

Answer 10

if Market Price > Option Price

MP less OP
—————————- x # of Shares
MP

Question 11

What to do if there are multiple potential ordinary shares?

Answer 11

Options and Warrants → always rank 1
Convertibles → ranked according to ascending incremental EPS