Calculate la scans estimated profit after tax for the year

Question

Assignment - One calculative question and an essay question for 500 words.

Question 1 - EPS

The following summarised information is available in relation to 'La Scan, a publicly listed company in Australia:

Statement of comprehensive income extracts for years ended 30^th June:

	2018		2017
	Continuing	Discontinued	Continuing	Discontinued
	$'000	$'000	$'000	$'000
Profit after tax from:
Existing operation	2,000	(750)	1750	600
Newly acquired operations*	450		nil

* Acquired on the 1^st November 2017.

Analyst expect profits from the market sector in which La Scan's existing operations are based to increase by 6% in the year to 30^th June 2019 and by 8% in the sector of its newly acquired operations.

On 1^st July 2016 La Scan had:

• $12 million of $1 ordinary shares in issue.
• $5 million 8% convertible debentures 2023; the terms of conversion are 40 equity shares in exchange for each $100 of debenture.
• On 1 January 2018 the directors of La Scan were granted options to buy 2 million shares in the company for $1 each. The average market price of La Scan's shares for the year ending 30^th June 2018 was $2.50 each.

Assume an income tax rate of 30% for year 2016, 2017 and 2018.

Required:

(i) Calculate La Scan's estimated profit after tax for the year ending 30 June 2019 assuming the analysts' expectations prove correct.

(ii) Calculate the diluted earnings per share (EPS) on the continuing operations of La Scan for the year ended 30 June 2018 and the comparatives for 2017.

Question 2 - Explain the concepts coercive isomorphism and normative isomorphism. How can these concepts be used to explain voluntary corporate reporting practices?