Question 3 (Basic EPS, Reinstated Basic EPS)

On the 1 January 2019, Randini Bhd (RB) owns 1,000,000 units of ordinary share at par value RM1.00, and at market value RM2.00 each. The reported net profit for RB at the year end of 31 December 2019 amounting RM250,000. The following events which took place during the year 2019 were gathered from the records of RB:

1. The RBs earnings per share (EPS) in 2018 was RM0.24 per share.
2. On 1 July 2019, RB declared to offer right issues at 1 share for every 4 shares held by the existing shareholders at market price RM1.00 each. All the shareholders taken up the offer.
3. The Price/Earnings Ratio (P/E) of the industry in 2019 is 133.

Required:

1. Calculate the Basic EPS for RB for year 2019.
2. Reinstate the Basic EPS for RB for year 2018.

Calculate the P/E for RM in 2019. Explain your answer

Question 3 (Basic EPS, Reinstated Basic EPS)

On the 1 January 2019, Randini Bhd (RB) owns 1,000,000 units of ordinary share at par value RM1.00, and at market value RM2.00 each. The reported net profit for RB at the year end of 31 December 2019 amounting RM250,000. The following events which took place during the year 2019 were gathered from the records of RB:

1. The RBs earnings per share (EPS) in 2018 was RM0.24 per share.
2. On 1 July 2019, RB declared to offer right issues at 1 share for every 4 shares held by the existing shareholders at market price RM1.00 each. All the shareholders taken up the offer.
3. The Price/Earnings Ratio (P/E) of the industry in 2019 is 133.

Required:

1. Calculate the Basic EPS for RB for year 2019.
2. Reinstate the Basic EPS for RB for year 2018.

Calculate the P/E for RM in 2019. Explain your answer