For the year, Rhodes SA has a profit attributable to ordinary equity holders of 6,000,000 (in euros) and a weighted average number of shares of 5,000,000 units; all the potential shares below are outstanding all year and dilutive judged against basic earnings alone. In order of issue: a convertible bond (interest removed of 420,000 after tax, 700,000 units shares), convertible preference shares (dividends removed of 1,200,000, 800,000 units shares) and options (250,000 units incremental shares with no effect on the numerator). Calculate the incremental earnings per share of the convertible preference shares, then diluted earnings per share by ranking the instruments by increasing incremental earnings. Round earnings per share to two decimals (case convention).
- Profit attributable to ordinary equity holders
- 6,000,000
- Weighted average number of ordinary shares
- 5,000,000
- Interest on the bond removed, after tax
- 420,000
- Shares arising from conversion of the bond
- 700,000
- Dividends on the convertible preference shares
- 1,200,000
- Shares arising from conversion of the preference shares
- 800,000
- Incremental shares from the options
- 250,000