Craven Ltd Has 10,000,000 Ordinary Shares on Issue at the Beginning

question 2

Multiple Choice

Craven Ltd has 10,000,000 ordinary shares on issue at the beginning of the year,1 July 2003.These shares were issued at $0.50 each and have a current market value of $3.00.On 1 November 2003,Craven Ltd bought back 1,000,000 ordinary shares originally issued at $0.50 for $1.90 each.On 1 February 2004,1,500,000 shares were issued fully paid up at the current market value of these shares.Also during the period,500,000 partly paid-up ordinary shares were issued.They were issued on 1 April 2004 at an issue price of $2.90.These shares were partly paid to $1.80.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. Craven Ltd has 3,000,000,$1.00 preference shares that provide cumulative dividends at a rate of 8 per cent.
For the year ended 30 June 2004,the net income after tax was $20,000,000.
What are the basic earnings per share for Craven Ltd for the year ended 30 June 2007?

• A) $1.99
• B) $2.00
• C) $1.96
• D) $1.53
• E) None of the given answers.

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Definitions:

Cognitive Inventory

An assessment tool used to evaluate patterns of thinking and behavior that may contribute to mental health issues.

Social Skill

Involves the ability to communicate, interact, and form relationships with others effectively and appropriately.

Affective

Relating to moods, feelings, and attitudes; often used in the context of psychological conditions that affect emotional states.

Psychasthenia

A psychological disorder characterized by excessive anxiety, feelings of inadequacy, and an inability to cope with demands of daily life.