(a) Compute the basic earnings per share amount for 2023 (rounded to 2 decimals). (b) Decide whether the preference shares are dilutive or not by showing your working
(a) Compute the basic earnings per share amount for 2023 (rounded to 2 decimals). (b) Decide whether the preference shares are dilutive or not by showing your working
(a) Compute the basic earnings per share amount for 2023 (rounded to 2 decimals). (b) Decide whether the preference shares are dilutive or not by showing your working
Beach Ltd has a net income after tax of $1 000 000 for the year ended 30 June 2023.
At the beginning of the period, Beach Ltd has 900 000 fully paid-up ordinary shares on issue.
On 1 December 2022, Beach Ltd had issued a further 300 000 fully paid-up ordinary shares.
At the beginning of the current period, Beach Ltd also had 500 000, $1.00, 5% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income.
The 500 000 cumulative preference shares can be converted into 250 000 ordinary shares at the option of the preference shareholders.
Required:
(a) Compute the basic earnings per share amount for 2023 (rounded to 2 decimals).
(b) Decide whether the preference shares are dilutive or not by showing your working
Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.
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