On 1 October 2019, Etta Co had 25 million equity shares of 50 cents each. No new shares were issued during the year ended 30 September 2020. However, on that date, there was an outstanding share option to purchase 2 million equity shares at $1.20 each. The average value of equity shares during the year to September 30, 2020, was $3. Ettas profit after tax for the year-end was $1,550,000.

Calculate the basic and diluted earnings per share for Etta. (8 marks)

C. The profit after tax for Barstead for the year ended 30 September 2009 was $15 million. At 1 October 2008 the company had in issue 36 million equity shares and a $10 million 8% convertible loan note. The loan note will mature in 2010 and will be redeemed at par or converted to equity shares on the basis of 25 shares for each $100 of loan note at the loan-note holders option. On 1 January 2009 Barstead made a fully subscribed rights issue of one new share for every four shares held at a price of $280 each. The market price of the equity shares of Barstead immediately before the issue was $380. The earnings per share (EPS) reported for the year ended 30 September 2008 was 35 cents.

Barsteads income tax rate is 25%.