Section B (40 marks) Answer TWO questions Question 2 a) The profits attributable to the ordinary shareholders of ABC plc are as follows: 000 Year to 31 December 20X2 1,800 Year to 31 December 20X3 2,475 For many years, the company's issued share capital has consisted of 9 million ordinary shares. However, on 1 April 20X3, the company made a 1 for 4 rights issue at 50p per share. This issue was fully subscribed. The market value of the company's shares just before the rights issue was 1 per share. Required: Calculate the basic EPS for the year to 31 December 20X3 and the restated basic EPS for the year to 31 December 20X2. (10 marks) b) Markat, a publicly listed company has a March 31st year-end. On 1 April 20X5 Markat issued $20 million 8% convertible loan stock at par. The terms of conversion (on 1 April 20X8) are that for every $100 of loan stock, 50 ordinary shares will be issued at the option of loan stockholders. Alternatively the loan stock will be redeemed at par for cash. Also, on 1 April 20x5 the directors of Markat were awarded share options on 12 million ordinary shares exercisable from 1 April 20X8 at $1.50 per share. The average market value of Markat's ordinary shares for the year ended 31 March 20X6 was $2.50 each. The income tax is 25%. Earnings attributable to ordinary shareholders for the year ended 31 March 20X6 were $25,200,000 and 84 million ordinary shares in issue. Required: Calculate Markat's basic and diluted earnings per share for the year ended 31 March 20X6 (comparative figures are not required). You may assume that both the convertible loan stock and the directors' options are dilutive. Provide clear workings for any calculations. (10 marks) Total 20 marks