a the issued share capital of manfred a quoted company on 1 november 2004 consisted 537887

(a) The issued share capital of Manfred, a quoted company, on 1 November 2004 consisted of 36,000,000 ordinar y shares of 75 cents each. On 1 May 2005 the company made a rights issue of 1 for 6 at $1.46 per share. The market value of Manfred”s ordinar y shares was $1.66 before announcing the rights issue. Tax is charged at 30% of profits. Manfred reported a profit after taxation of $4.2 million for the year ended 31 October 2005

and $3.6 million for the year ended 31 October 2004. The published figure for ear nings per share for the year ended 31 October 2004 was 10 cents per share.

Required:

Calculate Manfred”s earnings per share for the year ended 31 October 2005 and the comparative

figure for the year ended 31 October 2004.

(b) Brachly, a publicly quoted company, has 15,000,000 ordinar y shares of 40 cents each in issue throughout its financial year ended 31 October 2005. There are also:

? 1,000,000 8.5% conver tible preference shares of $1 each in issue. Each preference share is convertible into 1.5 ordinar y shares.

? $2,000,000 12.5% convertible loan notes. Each $1 loan note is convertible into 2 ordinary shares.

? Options granted to the company”s senior management giving them the right to subscribe for 600,000 ordinar y shares at a cost of 75 cents each.

The statement of comprehensive income of Brachly for the year ended 31 October 2005 reports a net profit after tax of $9,285,000 and preference dividends paid of $85,000. Tax on profits is 30%. The average market price of Brachly”s ordinar y shares was 84 cents for the year ended 31 October 2005.

Required:

Calculate Brachly”s basic and diluted earnings per share figures for the year ended 31 October 2005.