The basic profit of Bernay SA attributable to ordinary equity holders, already net of preference dividends, is 2,000,000 (in euros). The entity has two dilutive convertible instruments: a bond whose interest expense before tax is 90,000, deductible at a rate of 30% (case datum), and convertible preference shares whose dividends of 40,000, already deducted in basic earnings, carry no tax effect. Calculate the numerator of diluted earnings if both instruments are included.
- Basic profit attributable to ordinary equity holders
- 2,000,000
- Interest expense of the bond before tax
- 90,000
- Tax rate applicable to the interest
- 30 %
- Dividends on the convertible preference shares
- 40,000