Taylor Entity (TE) granted executive share options in 2016 for the year 2017 that are exercisable...

Taylor Entity (TE) granted executive share options in 2016 for the year 2017 that are exercisable for a total of 45,000 shares at $50 per share. No options were exercised during the year. The current average market price is $75 per share. The total reported profit or loss by TE for 2017 is $1,000,000. The total weighted-average number of shares outstanding is 250,000 (excluding share options).

a. Calculate the basic EPS for TE in the year 2017, as required by IAS 33 (5 points)

b. Calculate the diluted EPS for TE in the year 2017, as required by IAS 33

Solutions

Expert Solution

A. Basic EPS for TE in the year 2017

	Basic EPS =	Profit or loss attributable to ordinary equity holders
	Basic EPS =	weighted average number of ordinary shares

	=	1000000
	=	250000

	=	$4



B. Diluted EPS for TE in the year 2017
	Calculation of wighted avergae no.s of diluted shares		No.s
	Weighted average shares outstanding during year 2017		250000

	Weighted average number of shares under option		45000

	Less: Weighted average number of shares that would have been issued at average market price = (45000*50)/75
			30000

	Total weighted average number of diluted shares		265000

	Diluted EPS=	Profit or loss attributable to diluted equity holders
	Diluted EPS=	weighted average number of diluted shares

	=	1000000
	=	265000

	=	$3.77

ekkarill92 answered 1 year ago

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