Question: Theoretical exrights value, rights adjustment factor and basic earnings per share LO5 At the beginning of the current reporting period (1 January

Theoretical ex‐rights value, rights adjustment factor and basic earnings per share    LO5 At the beginning of the current reporting period (1 January 2020 – 31 December 2020) Diamond Ltd has 60 000 ordinary shares on issue. The company announced a 1‐for‐5 rights issue on 1 January 2020. The exercise price is $2 and the last date to exercise the rights is 1 April 2020. The market price of one share immediately before exercise on 1 April 2020 was $3. At the end of the current reporting period, Diamond Ltd determined profit attributable to ordinary shareholders at $244 650. Required Determine the theoretical ex‐rights value per share, the rights adjustment factor, and the basic earnings per share.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Financial Reporting Questions!

Read the questions in IFRS2-7 then answer them using the M&S annual reports for the year ended April 2, 2016. (provide complete and comprehensive answers. Also, do not have any grammatical errors) DO...

Q1 . Read the attached Case study 1 then answer the questions at the end ( a-e ) the citation has to include the web link and date retrieved. Q2 . Read the questions on IFRS1 then answer using the...

""5"" 1 Accounts, Trade and Other receivables (not including tax receivable] [in N01 vet millions of CAD) answered Marked out at Select one: 8.30 (I) a. Less than $300 l." E? Elm (:3 0:. Between $3...

Using Your Judgment Financial Reporting Problem Marks and Spencer plc (M&S) The financial statements of M&S (GBR) are presented in Appendix bellow. The complete annual report, including the notes to...

Hello, Can someone please help me with this assignment? Please see attached file. Multiple Choice 1. On January 1 of the current year, Tire Company enters into a five-year lease agreement for...

QUESTION: PLEASE DO 5 AND 6 5. Calculate various measures as follows: a. accounts receivable turnover for the reporting year. b. days sales uncollected c. inventory turnover for the reporting year....

I need help answering the following questions.. Multiple Choice On January 1, 2016, a companys new president was awarded a $200,000 bonus that would be paid out in two $100,000 installments in 2018...

Let (a) be a sequence of positive reals such that a, = 2 and lim +1, = 11-0 (a-an) is (Correct upto two decimal places)_ 1 Then the sum of infinite series

According to the Wall Street Journal (WSJ), Apple, Inc. (AAPL) announced in 2013 a 7-for-1 stock split. Similarly, many other publicly traded companies have announced stocks splits. Most stock...

The presentation of earnings per share is affected by the existence of prior period adjustments. Group of answer choices True False

As illustrated in Figure 6.9, a limit exists for the relationship between map distance and the percentage of recombinant offspring.Even though two genes on the same chromosome may be much more than...

Why do investors typically accept a lower risk-adjusted rate of return on debt capital than equity capital? Suppose a stable, financially healthy, profitable, tax-paying firm that has been financed...

Explain the theory behind the dividends valuation approach. Why are dividends value-relevant to common equity shareholders?

How do you compute Notes and Coins held by the Non-Banking Private Sector?

Pumpkin Spice Corp reported retained earnings of $4,000,000 at December 31, 2019. In 2020, the company earned $500,000 of profit before tax. Pumpkin Spice Corp. declared a $100,000 cash dividend and...

The beta for Cowboy Industries, Inc. is 0.9. The expected return on the market portfolio is 12.0% and the risk-free rate is 3.0%. If the CAPM/SML is correct, what is Cowboy Manufacturings required...