Problem
At the start of the most recent financial year, on June 1, 2021, Rolo Ltd had 13.8 million shares in issue. On September 30, 2021, the company made a rights issue of one share for every six held. At that point, the stock had a market price of $1.80 but the rights issue was done at a price 25% less than market value.
For the year to June 2022, net income was $7.9 million and ordinary dividends paid amounted to $315,000, while for the year to June 2021, net income was $6.2 million and ordinary dividends paid amounted to $220,000.
The company had $8 million in 6% preference shares in issue during both years.
Task
a) Calculate the EPS for 2022.
b) Calculate the original and restated EPS for 2021.