Question: Question A4 BFK a listed entity, had a weighted average of 27 million ordinary shares in issue during its financial year ended 31 August 2020.

Question A4

BFK a listed entity, had a weighted average of 27 million ordinary shares in issue during its financial year ended 31 August 2020. It was also financed throughout the year by an issue of convertible bonds with a debt value of $50mn, the effective interest rate was 12%. The bonds are convertible into 6 million ordinary shares.

BFK is subject to a tax rate of 30%. The profit after tax for the year ended 31 August 2020 was

$50,000,000.

The Basic EPS and Diluted EPS for 2017 is:

	Basic EPS	Diluted EPS
A.	185 cents	164 cents
B.	54 cents	164 cents
C.	185 cents	151 cents
D.	54 cents	151 cents

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