3. The last financial year of Bex Chang plc, a publicly traded company, ended on 31 March 2019. On 31 January 2019 Bex Chang plc made a rights issue of 2 for 5 at an exercise price of 2.80. The market value of each ordinary share on 30 January 2019 was 3.20 per share. The new shares were eligible for all subsequent dividends and the issue was fully subscribed. On 1 April 2019 the share capital of Bex Chang plc was as follows: Authorised Issued Ordinary shares of 1 8% Preference shares of 1 50,000,000 24,000,000 12,000,000 10,000,000 Bex Chang plc's summarised income statement for the year ended 31 March 2019 was as follows: Page 4 of 14 NBS8340 Net profit Taxation Profit for the year 8,863,300 1,773,000 7,090,300 The market value of each ordinary share on 1 April 2018 was 2.79. Required a) Calculate Bex Chang plc's basic earnings per share for the year ended 31 March 2019 in accordance with the provisions of IAS33 Earnings per share. (12 marks) b) Calculate Bex Chang plc's PE ratio as at 31 March 2019. (2 marks) c) Discuss the benefits to both shareholders and the company when a company makes a rights issue. Are there any risks? (6 marks) Total 20 marks