In connection with MFRS 133, Earnings per Share:

1. Define the profit used to calculate basic EPS and explain the relationship between EPS and price/earnings (PE) ratio.

(10 marks)

2. The following information relates to Alpha Berhad:

Statement of comprehensive income for the year ended 31 March 2017

RM000

Profit before taxation 1,000

Taxation (420)

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Profit after taxation 580

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Additional information:

The issued share capital of Alpha Berhad as at 1 April, 2016 are:

16,000,000 Ordinary shares of 25 sen each

1,000,000 10% cumulative preference shares of RM 1 classified as equity

1 July 2016, Bonus issue of ordinary shares issued, 1 for 5

1 October 2016, market purchase of 500,000 of own shares at a price of RM 1.00 per share Required:

On the basis of the facts given, compute the basic EPS figures for 2017.

(15 marks)