Question
Halcrow makes a rights issue below market price. Compute the TERP and bonus factor, the weighted average shares, basic EPS, the restated comparative and diluted EPS with options.
Statements in this challenge
- TERPNumeric Answer
- Weighted Average SharesNumeric Answer
- Basic EPSNumeric Answer
- Restated 2025 EPSNumeric Answer
- Diluted EPSNumeric Answer
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IAS 33 — diluted earnings per share
Diluted EPS asks what basic EPS would have been had all dilutive potential ordinary shares converted. Adjust the numerator for anything that would no longer be charged after conversion, adjust the denominator for the extra shares, and include an instrument only if it actually reduces EPS.
Common mistakes
- Including an antidilutive instrument — one that would raise EPS must be excluded.
- Adding the shares from convertible debt without adding back the after-tax interest saved.
- Applying the full share count for instruments issued part-way through the period instead of time-weighting them.
Further readingIAS 33: basic and diluted EPS