QUESTION 2 Gambiran Bhd (GB) is a public listed company with authorized capital consists of 50,000,000 Ordinary Share Capital RM1.00 each; and 6% Preference Shares of RM10,000,000, RM5.00 each. The following information with regard to GB's shares is available: 1. on 31 December 2019, GB has fully paid Ordinary Shares RM20,000,000 RM4,000,000 6% Preference Shares at RM5.00 each. 2. The GB's basic EPS for 2019 is RM0.15 per share when the at RM1.00 each; and fully paid PE ratio was 20. 3. Recorded earnings in 2020 is RM4,500,000. 4. The average market price for GB's ordinary shares in 2020 is RM4.00 each. 5. The Preference Shares are convertible to Ordinary Shares at 4 units of Ordinary Shares to 1 unit of Preference Shares. 6. During the year, GB has declared to pay full dividend for the preference shares. 7. On 1 April 2020, GB declared share dividends at 20%. 8. On 1 July 2020, GB repurchased 6,000,000 of Ordinary Shares.
QUESTION 2 Gambiran Bhd (GB) is a public listed company with authorized capital consists of 50,000,000 Ordinary Share Capital RM1.00 each; and 6% Preference Shares of RM10,000,000, RM5.00 each. The following information with regard to GB's shares is available: 1. on 31 December 2019, GB has fully paid Ordinary Shares RM20,000,000 RM4,000,000 6% Preference Shares at RM5.00 each. 2. The GB's basic EPS for 2019 is RM0.15 per share when the at RM1.00 each; and fully paid PE ratio was 20. 3. Recorded earnings in 2020 is RM4,500,000. 4. The average market price for GB's ordinary shares in 2020 is RM4.00 each. 5. The Preference Shares are convertible to Ordinary Shares at 4 units of Ordinary Shares to 1 unit of Preference Shares. 6. During the year, GB has declared to pay full dividend for the preference shares. 7. On 1 April 2020, GB declared share dividends at 20%. 8. On 1 July 2020, GB repurchased 6,000,000 of Ordinary Shares.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1. reinstated the 2019 EPS.
2. compute the PE (price earning) ratio for the year 2019 and 2020. briefly explain the answer.
help me to explain and answer question 1 and 2. thanks
Transcribed Image Text:QUESTION 2
Gambiran Bhd (GB) is a public listed company with authorized
capital consists of 50,000,000 Ordinary Share Capital RM1.00
each; and 6% Preference Shares of RM10,000,000, RM5.00
each.
The following information with regard to GB’s shares is
available:
1. on 31 December 2019, GB has fully paid Ordinary Shares
RM20,000,000
RM4,000,000 6% Preference Shares at RM5.00 each.
2. The GB's basic EPS for 2019 is RM0.15 per share when the
PE ratio was 20.
at
RM1.00 each; and
fully paid
3. Recorded earnings in 2020 is RM4,500,000.
4. The average market price for GB's ordinary shares in 2020
is RM4.00 each.
5. The Preference Shares are convertible to Ordinary Shares at
4 units of Ordinary Shares to 1 unit of Preference Shares.
6. During the year, GB has declared to pay full dividend for
the preference shares.
7. On 1 April 2020, GB declared share dividends at 20%.
8. On 1 July 2020, GB repurchased 6,000,000 of Ordinary
Shares.
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