Question 8 As at 31 December 20x1 Pear Ltd. has 2,000,000 ordinary shares outstanding and profit attributable to ordinary shareholders for the period is MU15,000,000. Pear Ltd. has 100,000 convertible preference shares with a par value of MU100 with holders entitled to a cumulative dividend of MU10 per share. Each preference share is convertible into two ordinary shares. What is diluted earnings per share for 31 December 20x1? Diluted earnings per share for 31 December 20x1 is MU7.80 which is calculated as {[MU15,000,000 + (100,000 x MU10)] = [2,000,000 + (100,000 2)]} Diluted earnings per share for 31 December 20x1 is MU6.36 {[MU15,000,000 - [(100,000 x MU100) x (MU10 MU100)]] [2,000,000 + (100,000 x 2)]} Diluted earnings per share for 31 December 20x1 is MU6.83 {[MU15,000,000 - [(100,000 x MU100) x (MU10 MU100)]] [2,000,000 + (100,000 2)]} Diluted earnings per share for 31 December 20x1 is MU7.27 {[MU15,000,000 + [(100,000 x MU100) x (MU10 MU100)]] [2,000,000 + (100,000 x 2)]}