Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10% convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 of loan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were £32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock is dilutive. Calculate company X’s diluted EPS for the year ended 30th June 20X6
Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10% convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 of loan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were £32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock is dilutive. Calculate company X’s diluted EPS for the year ended 30th June 20X6
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10%
convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 of
loan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is
25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were
£32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock is
dilutive.
Calculate company X’s diluted EPS for the year ended 30th June 20X6
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education