Basic & Diluted EPS

1. ABC has the following preference shares in issue at end of 2016:

• 5% non-cumulative – Rs 100,000: classified as liabilities. During
the year dividend paid was Rs 100,000
• Increasing rate cumulative preference shares issued at discount in
2000, with a cumulative dividend rate of 10% from 2017. Shares
issued at discount to compensate for no dividends in initial years.
Accrual of discount for current year is Rs 18,000. Classified as
equity – Rs 200,000.
• 8% non-cumulative – During the year some shares were
repurchased at a discount of Rs 1,000. (outstanding at end of year
Rs 50,000)
• Profit after taxes for the year is Rs 150,000

Estimate profit attributable to ordinary equity holders for calculating

basic EPS

2. Find number of shares for purpose of calculation of Basic EPS for the
year ended 31st March 2012.
• 01/04/11: 100,000 equity shares outstanding
• 15/06/11: Issued 75,000 equity shares
• 08/11/11: 50,000 equity shares issued on conversion of preference
shares
• 22/02/12: Buyback of 20,000 equity shares
• 31/03/12: 205,000 equity shares outstanding

3. On 1st April 2015 issued capital consisted of equity shares – Rs

100,00,000 (FV – Rs 25/- each) and Rs 50,00,000 in 10% cumulative
preference shares (FV – Rs 1/- each).
On 1st October 2015 the firm issued a 1:4 bonus.
Profits for years ended March ‘15 & ‘16 were Rs 45,00,000 and
55,00,000 respectively.
Calculate Basic EPS for years 2014-15 & 2015-16
4. On 1st January 10,00,000 equity shares were in issue for ABC Ltd.
On 28th February 2,00,000 equity shares were issued for consideration.
A 1:3 bonus was issued on 31st August.
On 30th November 2,50,000 equity shares were issued for consideration.
Calculate the number of shares which would be used for estimating basic
EPS for the year ended on 31st December.

5. PAT for the year ended 31st December 2016 was Rs 63,00,000 and
18,00,000 shares (FV Rs 10/-) were outstanding. On 31st March 2017, a
1:4 rights issue was completed for Rs 30/share. The MPS just prior to the
rights issue was Rs 60/share. PAT for the year ended 31st December 2017
was Rs 87,50,000.
Calculate EPS.

6. PQR has 10,00,000 equity shares (FV - Rs 1) and 1000 10% convertible
debentures (FV – Rs 100). Each debenture is convertible into 20 equity
shares on demand. During the year no debentures were converted.
PAT for the year is Rs 500,000 and tax rate is 21%.
Calculate basic & diluted EPS.

7. MN has 40,00,000 equity shares (FV - Rs 25/-) as on 31 st December 2017

& 2018.
It has granted 630,000 options giving holders the right to acquire shares
at Rs 70/share anytime until 31st December 2019. There was no exercise
of options till date.
PAT for the year ended Dec’17 was Rs 500,000 & Dec’18 was Rs
600,000
The average MPS during these years was Rs 120 & Rs 160 respectively.

8. Earnings for equity shareholders – Rs 60,00,000.

Number of equity shares – 20,00,000. Average MPS – Rs 75
Options – 100,000 with exercise price of Rs 60
8% Convertible Preference Shares – 800,000 shares of FV 100, each
convertible into 2 equity shares
5% Convertible bonds – 100,000 bonds – each convertible in 20 equity
shares
Tax Rate – 40%
Calculate Basic & Diluted EPS