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Please use the following information to answer this question: Company A maintained 2,400 million shares outstanding at the beginning of Year 2. Throughout year
Please use the following information to answer this question: Company A maintained 2,400 million shares outstanding at the beginning of Year 2. Throughout year 2, it underwent the following capital restructuring: 31/1 31/3 30/6 30/9 30/12 In the end of Year 2, Company A reported an after tax net profit of 350 million and the corporate tax rate applicable to Company A is 30% By the end of Year 2, in the capital structure of Company A, there are: 1. Declared a stock dividend of 10% (1 share dividend for every 10 share on hand) A private placement of 500 million new shares A 2 for 1 stock split A new issuance of 500 million shares. Redeemed 200 million shares 2. 3. Convertible bond issued at par with a face value of $500 million carrying a coupon of 5% and a conversion ratio of 3 for every $10 face value. 20 million convertible preference share with face value of $10 and a preferred dividend rate of 8% p.a.. Conversion ratio is 4 common shares for 1 preference share. 100 million equity warrants with an exercise price of $2. On average, shares of company A are trading at 1.5 throughout Year 1 and the closing price for company A's share is $2.2 by the end of Year 1. 3a) If the EPS for Year 1 is $0.25 per share, what will it be restated in the financial report of Year 1? (5%) 3b) What is the weighted average no. of shares of Company A? (10%) 3c) What is the basic EPS of Company A in Year 2? (5%) 3d) Are the convertible bond issued by Company A dilutive? (5%)
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