A company's profit after tax available to ordinary shareholders is KSh 720,000 and there are 240,000 ordinary shares. What is the earnings per share?
Answer and explanation
Correct answer: B. KSh 3
- Step 1: EPS = profit available to ordinary shareholders / number of ordinary shares. Step 2. = 720,000 / 240,000 = KSh 3. Answer: KSh 3. Why not the others: KSh 0.33: That divides shares by profit. KSh 1.5: That divides by twice the number of shares. KSh 4: That adds one shilling to the correct figure.
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