KLSS Bhd has 10,000,000 issued shares capital of RM2.50 each. During the beginning of the accounting...

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KLSS Bhd has 10,000,000 issued shares capital of RM2.50 each. During the beginning of the accounting year 2020, the company issued: RM10,000,000 of 10% convertible loan stock, convertible in four-year time at the rate of 1 share per RM100 loan stock. RM500,000 of 5% convertible loan stock, convertible in one-year time at the rate of 1 share per RM50 stock. The total profit after tax were RM6,500,000 and RM7,000,000 for the year ended 2020 and 2021 respectively. Assumed the tax rate was 30%. Required: i) ii) iii) Calculate the basic EPS for 2020 and 2021. Calculate the diluted EPS for 2020 and 2021. Comment on dilution effect of EPS for both years. (3 marks) (5 marks) (2 marks) KLSS Bhd has 10,000,000 issued shares capital of RM2.50 each. During the beginning of the accounting year 2020, the company issued: RM10,000,000 of 10% convertible loan stock, convertible in four-year time at the rate of 1 share per RM100 loan stock. RM500,000 of 5% convertible loan stock, convertible in one-year time at the rate of 1 share per RM50 stock. The total profit after tax were RM6,500,000 and RM7,000,000 for the year ended 2020 and 2021 respectively. Assumed the tax rate was 30%. Required: i) ii) iii) Calculate the basic EPS for 2020 and 2021. Calculate the diluted EPS for 2020 and 2021. Comment on dilution effect of EPS for both years. (3 marks) (5 marks) (2 marks)

Answer rating: 100% (QA)

To calculate the basic and diluted earnings per share EPS for KLSS Bhd for the years 2020 and 2021 we need to consider the impact of the convertible l... View the full answer