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Chapter 20
Example 5.4
EPS = 66c
Profit attributable to ordinary shareholders 600 – 150
Basic EPS = –––––––––––––––––––––––––––– ––––––––
Weighted average of ordinary shares (W1) 684
= 65.8c = 66c
(W1) Weighted average number of ordinary shares
b/f n/12 Bonus Total
Fraction
st
1 May 600m 4/12 4.00/3.92 204
(W2)
st
1 September 720m 8/12 480
–––––
684m
(W2) Bonus fraction
Cum rights price/Theoretical ex rights price (W3) = 4.00/3.92
(W3) Theoretical ex rights price
Prior to rights issue 5 × $4 = 20.00
New rights issue 1 × $3.50 = 3.50
–– –––––
6 23.50
–– –––––
Theoretical ex rights price of each share is $23.50 ÷ 6 = $3.92
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