Cavendish Plc Has 2 000 000 Ordinary Shares on Issue

question 35

Multiple Choice

Cavendish Plc has 2 000 000 ordinary shares on issue at the beginning of the year,1 July 2014.These shares were issued at €2.00 each and at the end of the period have a current market value of €4.50.On 1 August 2014,Cavendish Plc bought back 300 000 ordinary shares originally issued at €2.50 for €3.00 each.On 1 November 2014,800 000 shares were issued fully paid up at the current market value of these shares.On 1 March 2015,300 000 partly paid-up ordinary shares were issued at an issue price of €3.50.These shares were partly paid to €2.00.The partly paid shares are permitted proportionate rights to vote and receive dividends based on the relationship between the amount paid up and the issue price. For the year ended 30 June 2015,the net income after tax was €1 050 000.
What are the basic earnings per share for Cavendish Plc for the year ended 30 June 2015?

• A)€0.24
• B)€0.45
• C)€0.46
• D)€0.49

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Definitions:

Original Estimate

The initial projection or calculation of the cost or duration of a project.

Plant Asset

Long-term physical assets used in the operation of a business that are not intended for resale, such as buildings, machinery, and equipment.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.

Inventions

Novel and unique creations or discoveries that are the result of human creativity and ingenuity.