Awake Plc Has a Net Income After Tax of £5

question 36

Multiple Choice

Awake Plc has a net income after tax of £5 620 000 for the year ended 30 June 2016.At the beginning of the period Awake Plc has 1 000 000 fully paid-up ordinary shares on issue.On 1 February 2016,Awake Plc makes a rights issue of 1 fully paid share for every 4 shares held.The required payment for the rights issue shares was £3.00.The last cum rights price was £3.80.Awake Plc also has 2 000 000,£1.00,cumulative,7 per cent preference shares on issue for the whole period.The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. What are the basic earnings per share for the period ended 30 June 2015 in accordance with IAS 33?

• A)£4.39
• B)£4.61
• C)£4.97
• D)£5.22

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Definitions:

Balance Sheets

Financial statements that summarize a company's financial position, including assets, liabilities, and shareholders' equity at a specific point in time.

Swaps

Financial agreements to exchange or "swap" cash flows or other financial instruments between two parties, typically involving interest rates, currencies, or commodities.

Index Futures

Financial contracts to buy or sell a financial index at a predetermined future date and price.

Short Position

An investment strategy where an investor sells a security that he does not own at the time of sale, typically borrowing it, and hopes to buy it back later at a lower price.