SECTION B

ANSWER ANY THREE QUESTIONS – EACH QUESTION 20 MARKS

QUESTION 2

On 1st January 2018, GREENBEANS plc (“GREENBEANS) had 1,400,000 €0.50 ordinary shares and 600,000
10% €1 convertible preference shares in issue. GREENBEANS’ profit after tax for the year ended 31st
December 2018 was:

Profit after Tax €4,000,000

On 1st February 2018, GREENBEANS issued a further 400,000 €0.50 ordinary shares at full market price.

Options to purchase 600,000 € 0.50 ordinary shares were issued on 1 May 2018 at €4.25 per share. While the
options due to expire on 30 April 2020, all were exercised on 31 July 2019.

Convertible Loan Stock of €500,000 at an interest rate of 7% per annum was issued at par on 31st July 2014.
Each €100 loan stock is convertible into 50 €0.50 ordinary shares at any time at the option of the holder. Interest
is paid half yearly on 30th June and 31st December each year. On 1st July 2018, €200,000 of loan stock was
converted when the market price was €4.50 per share.

The preference shares are convertible into ordinary shares at the option of the holder on the basis of 1 €0.50
ordinary share for every 2 convertible preference shares held. Holders of 300,000 preference shares converted
them into ordinary shares on 1st December 2018.

The average market price of GREENBEANS’ ordinary shares during the year ended 31st December 2018 was
€7.10 per share, and the tax rate is 15%.

An ordinary dividend of €10,000 was approved and paid on 21 December 2018.

GREENBEANS’ financial statements for the year ended 31st December 2018 were approved on 30 April 2019.

REQUIREMENTS

Calculate and comment on the EPS and Diluted EPS from GREENBEANS

Total 20 Marks