Page 399 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Answers

Example 5.7

Diluted EPS = 25c

Notional earnings 1,105,000
––––––––––––– ––––––––––– = 24.9c = 25c
Notional weighted 4,250,000 + 189,302
average number of (W1)
shares

(W1) Bonus issue shares from option

Full price shares (step 2) (3.20 × 740,000)/4.30 550,698

Bonus issue shares (step 3) 189,302 β
–––––––––
Options in existence (step 1) 740,000
–––––––––

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