The following are the results of Earno Limited, a public company, for the year ended 31 December. 

The 14% Preference Dividend paid in 20X0 is in respect of previous years. The proposed dividend in 20X0 and 20X1 were approved by shareholders of Earno Limited during the year ended 31 December 20X0 and 20X1 respectively, Earno Limited has issued Ordinary Share Capital of 100,000 @ €1 each.

Requirement Each of the following questions should be considered independently of one another.
Basic EPS Calculate the basic EPS for both years Issue at Full Market Price Assuming that Earno had issued 5,000 Ordinary Shares on 31 March 20X1 at full market price, calculate the basic EPS for both years.
Capitalisation/Bonus/Scrip Issue Assuming that on 31 May 20X1 Earno Limited issued one ordinary share for every 5 already held, calculate the basic EPS for both years.
Share Exchange Assuming that on 30 April 20X1 Earno Limited issued 10,000 Ordinary Shares as consideration for the acquisition of a subsidiary company, calculate the basic EPS for both years Rights issue for less than fulftmarket price Assuming that on the 30 June 20X1 (Market Price of share €4) Earno Limited invited its shareholders to subscribe to a 1 for 5 rights issue at €2 per share, calculate the basic EPS for both years.
Fully Diluted EPS

(a) Another class of equity ranking for dividend in the future Assuming that on 1 January 20X1, Earno Limited had issued 10,000 ‘A’ ordinary shares, which though not ranking for dividend in the current period, would do so subsequently, calculate the fully diluted EPS

(b) Convertible Securities Assume that on 31 March 20X1, Earno Limited issued €5,000 10% Convertible Debentures. These were convertible into Ordinary Shares as follows: 

None of the debentures had been converted at 31 December 20X1.
Calculate the fully diluted EPS (assume Corporation Tax @ 50%).

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Revenue Profit before tax Taxation Profit after taxation Dividends: Paid 14% Non-cumulative Preference 20X1 20X0 '000 '000 2,000 1,600 800 600 (300) (200) 500 400 (20) Proposed 10% Cumulative Preference (30) (30) 14% Non-Cumulative Preference (60) (40) Ordinary (10) (10) Transfer to Capital Reserves (90) Profit for year retained 310 300