Greune Co is preparing its financial statements for the year ended 31 December 208 which will be authorised for issue on 1 March 20X9. Greene Co made a profit of $3.5m for the year. At 1 January 208, Greene Co had 6 million shares in issue. On 1 May 208, Greene Co performed a 2 for 5 rights issue when the market price of a share was $3, resulting in a theoretical ex-rights price of $2.80. On 1 January 208, Greene Co issued options over 2 million shares, Each option allows the holder to buy a share for $2.25 on 31 December 209. The market price of a share at 31 December 208 is $3. Which, if any, of the following statements regarding the rights issue and earnings per share (EPS) is/are correct? (1) The rights issue will increase the number of shares used to calculate the basic EPS for 208 (2) The rights issue in 208 means that basic EPS for 207 will also need to be restated 2 only Neither 1 nor 2 Both 1 and 2 1 only