The capital structure of Chavboro, a quoted company, during the years ended 3 1 October 2005 and 2006 was as follows:

The company has an executive share option scheme which gives the company's directors the option to purchase a total of 100,000 ordinary shares for $2.10 each. During the year ended 3 I October 2006 no shares were issued in accordance with the share incentive scheme and the company’s obligations under the scheme remained unchanged, On 3 I August 2006 Chavboro pic made a I for 6 rights issue at $2.50 per share. The cum-rights price on the last day of quotation cum rights was $2.85 per share. The shares issued in the rights issue are not included in the figure for ordinary shares given above.

The deferred ordinary shares will not rank for dividends until I November 2010 when they will each be divided into two 50 cents ordinary shares ranking pari passu with the other ordinary shares then in issue.
The 12% loan stock is convertible into 50 cents ordinary shares on the following terms:
(i) if the option is exercised on I November 2007 each $100 of loan stock can be converted into 40 ordinary shares;
(ii) if the option is exercised on I November 2008 each $100 of loan stock can be converted into 35 ordinary shares.
The following information comes from the statement of comprehensive income of the company for the year ended 3 I October 2006:

You may assume that the yield on 2.5% government consolidated stock was 7.5% on I November 2005 and 6% on I November 2006, and that the rate of income tax is 30% throughout. Chavboro pic's reported earnings per share for the year ended 3 I October 2005 were 10 cents.
Required:

(a) Calculate Chavboro pic’s basic earnings per share in cents for the year ended 3 I October 2006.

(b) Calculate Chavboro pic’s restated earnings per share in cents for the year ended 3 I October 2005.

(c) Calculate Chavboro pic’s fully diluted earnings per share in cents for the year ended 3 I October 2006.

(d) Calculate Chavboro pic’s fully diluted earnings per share in cents for the year ended 3 I October 2005.

(e) How can an investor evaluate the quality of the earnings per share figure published in a company’s financial statements?

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6,000,000 ordinary shares of 50 cents 10% preferred shares of $1 300,000 deferred ordinary shares of $1 12% convertible loan stock $ 3,000,000 200,000 300,000 250,000