LKJ Limited had the following shares in issue on 1 January 2022: 40 million fully paid ordinary shares of HK$1 each and 30 million 5% non-redeemable preference shares of HK$1 each.

It issued the following shares at fair value during the year 2022.

1 April 2022 6,000,000

1 July 2022 3,000,000

1 October 2022 8,000,000

LKJ Limited issued 6 million share options on 1 January 2022. The holder of each option has the right to purchase 1 ordinary share at an exercise price of HK$20 per share. The average share price for 2022 was $30. It had a net profit after tax of $40 million for 2022.

Required

A. Explain ANY TWO REASONS why earnings per share is widely used as a measure of a companys performance

B. Calculate the weighted average number of shares for 2022. Show your workings.

C. Calculate the basic earnings per share for 2022. Show your workings.

D. Calculate the diluted earnings per share for 2022. Showing your workings.