UK Ltd for the year ended 31 December 2018.

Net Profit	$500m
Preference dividend	$300m
Share outstanding- Average	4000m

	Earnings effect	Shares effect
Convertible preference share	$300m	3000m
Convertible debt	$120m	3000m
Share options		5000m

The financial statements were authorized in late March 2019.

The diluted earnings per share for the year ended 31 December 2018 is 4.3 cents.

Required:

1. Assuming that the company made a one for two bonus issue on 3 January 2019. Calculate the diluted earnings per share for the year ended 31 December 2018.

2. In addition to all the above information, assuming $60m instead of $30m dividend is paid to the convertible preference shares (cumulative) due to the dividend for year 2017 is not paid. Calculate the diluted earnings per share for the year ended 31 December 2018. Briefly explain the effect of the $60m dividend on the earnings effect.