Professional Documents
Culture Documents
D. Exclude employee share options and include share options 2,128,000 598,148 3.56
F. Treat as 2 contracts but don't divide by mkt price 2,128,000 606,400 3.51
Suggested workings for Ratanakosin Ltd
REMOVED
Loan contract
Loan contract - cash option
2,351,600 1,059,726 2.22
Facts
(i) E£1,500,000 5% loan which can be settled in cash or 500,000 ordinary shares in 2005 at lender's option - REMOVED LOAN CONTRACT
(ii) Contract to pay for E£400,000 services in either cash or 100,000 ord shares at the Eflatoun's option on 7 Aug 2003, year contract
(iv) E£1 preference shares E£300,000 10% throughout 2003
(v) E£1 ordinary shares 1,000,000
(vi) Tax rate 42%
Contract for services
Loan contract REMOVED
Entity's option - assume shares
Lender's option - which is most dilutive? 100,000 shares will be issued
Shares option most dilutive Potential ordinary shares until 7 Aug 03
But lender cash short, so selects cash option Actual option taken is cash option
Time-weighting factor required (7Aug-31Dec removed)
Suggested feedback for Eflatoun Company Adjust preference share dividends
for tax = 30,000 x (1-42%)
Earnings per
Net profit Ordinary incremental Per
attributable shares share share
Profits for year 2,369,000
LESS: after tax preference shares (30,000)
Profits for ordinary shareholders 2,339,000 1,000,000 2.34 2.34