Calculate Basic EPS for each classExample 10Earning for ESHRs. 30,00,000No. of Equity SharesClass X (Face Value Rs. 10)1,50,000Class Y (Face Value Rs. 50)Class Z (Face Value Rs. 60)50,000Share of Y Class are entitled to extra dividend 2% and Share of Z Class are entitled to extradividend 5% in comparison to Class X shares.Calculate Basic EPS for each class
Question
Calculate Basic EPS for each classExample 10Earning for ESHRs. 30,00,000No. of Equity SharesClass X (Face Value Rs. 10)1,50,000Class Y (Face Value Rs. 50)Class Z (Face Value Rs. 60)50,000Share of Y Class are entitled to extra dividend 2% and Share of Z Class are entitled to extradividend 5% in comparison to Class X shares.Calculate Basic EPS for each class
Solution
To calculate the Basic Earnings Per Share (EPS) for each class, we first need to understand what EPS is. EPS is a financial ratio, which divides net earnings available to common shareholders by the total number of outstanding shares.
Here's how to calculate it:
- Calculate the total earnings for each class.
For Class X, the earnings are Rs. 30,00,000.
For Class Y, the earnings are Rs. 30,00,000 plus an extra dividend of 2%. So, the total earnings for Class Y are Rs. 30,00,000 + (2/100 * 30,00,000) = Rs. 30,60,000.
For Class Z, the earnings are Rs. 30,00,000 plus an extra dividend of 5%. So, the total earnings for Class Z are Rs. 30,00,000 + (5/100 * 30,00,000) = Rs. 31,50,000.
- Calculate the number of shares for each class.
For Class X, the number of shares is 1,50,000.
For Class Y and Class Z, the number of shares is 50,000 each.
- Calculate the EPS for each class.
For Class X, EPS = Earnings / Number of shares = Rs. 30,00,000 / 1,50,000 = Rs. 20.
For Class Y, EPS = Earnings / Number of shares = Rs. 30,60,000 / 50,000 = Rs. 61.2.
For Class Z, EPS = Earnings / Number of shares = Rs. 31,50,000 / 50,000 = Rs. 63.
So, the Basic EPS for Class X is Rs. 20, for Class Y is Rs. 61.2, and for Class Z is Rs. 63.
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