On 1 January, the issued share capital of Small Limited was 12 million preference shares of N$1 each and 10 million ordinary shares of N$1 each.

Assume where appropriate that corporation tax rate is 30%. The earnings for the year ended 31 December were N$ 5 950 000.

Required

Calculate the Earnings per share in respect of the year ended 31 December for each of the following circumstances (Each circumstance (a) to (f) is dealt with separately

a) On the basis that there was no change in the issued share  capital of the company  during the year ended 31 December (3 marks)

b) On the basis that the company made a bonus issue on 1 October  of one ordinary share for every  four shares in issue on 30 September (3 marks)

c) On the basis that the company issued 1 share for every 10 on 1 August at  full market price of N$4   (5 marks)

d) On the basis that the company made a rights issue of  N$1 ordinary  share on 1 October in the proportion  of 1  for every 3 shares held at a price of N$3. The middle market price  for the shares on the last day of quotation  cum rights was N$4 per share. (7 marks)

e) On the basis that the company made no new issue of shares during the year ended 31 December, but on that date, it had in issue N$ 2 600 000 10% Convertible loan  This loan  stock will be  converted into ordinary N$1 Shares as  follows

2016        90 N$1 Shares for N$100 nominal value loan stock

2017        85 N$1 shares for N$100 nominal value loan stock

2018        80 N$1 shares for N$ 100 nominal value loan stock

2019       75 N$1 shares for N$ 100 nominal value loan stock   (3 marks)

f) On the basis that the company made no issue of shares during the year ended 31 December, but on that date, there were outstanding options to purchase

74 000 ordinary N$1 shares at N$2.50 per share.  Share price  during the year was N$4