Alamanda is a public company in Johor. The company has agreed to issue 300,000 convertible bond with a par value of RM1,000; with a coupon rate of 7 per cent. The conversion price of its share is RM30 and at 15 per cent premium. Current operating profit is RM17,500,000 and it is expected to increase by 25 per cent after the financing took place. Current number of shares outstanding is 40,000,000 units and the tax rate is 30%. The company pays RM750,000 preferred shares dividend during the year.

Calculate:

a) Market price of shares

b) Conversion ratio

c) Conversion value

d) Conversion premium in RM and %

e) Number of shares if the bond is 45% converted

f) Earnings per share for:

i. Before financing ii. After financing but before conversion iii. After 45% conversion iv. Full conversion