Markat, a publicly listed company has a March 31st year-end. On 1 April 20X5 Markat issued $20 million 8% convertible loan stock at par. The terms of conversion (on 1 April 20X8) are that for every $100 of loan stock, 50 ordinary shares will be issued at the option of loan stockholders. Alternatively the loan stock will be redeemed at par for cash. Also, on 1 April 20X5 the directors of Markat were awarded share options on 12 million ordinary shares exercisable from 1 April 20X8 at $1.50 per share. The average market value of Markat’s ordinary shares for the year ended 31 March 20X6 was $2.50 each. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 31 March 20X6 were $25,200,000 and 84 million ordinary shares in issue. Required: (a) Calculate Markat's basic EPS for the year ended 20X6. (b) Calculate Markat's diluted EPS for the year ended 20X6.
Markat, a publicly listed company has a March 31st year-end. On 1 April 20X5 Markat issued $20 million 8% convertible loan stock at par. The terms of conversion (on 1 April 20X8) are that for every $100 of loan stock, 50 ordinary shares will be issued at the option of loan stockholders. Alternatively the loan stock will be redeemed at par for cash. Also, on 1 April 20X5 the directors of Markat were awarded share options on 12 million ordinary shares exercisable from 1 April 20X8 at $1.50 per share. The average market value of Markat’s ordinary shares for the year ended 31 March 20X6 was $2.50 each. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 31 March 20X6 were $25,200,000 and 84 million ordinary shares in issue.
Required:
(a) Calculate Markat's basic EPS for the year ended 20X6.
(b) Calculate Markat's diluted EPS for the year ended 20X6.
(comparative figures are not required)
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