CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 97 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 97
Topic #: 1

As at 31 October 20X7 TU's financial statementsshow the entity having profit after tax of$600,000 and 900,000$1 ordinary sharesin issue. There have been no issues of shares during the year. At 31 October 20X7 TUhave 300,000 share options in issue, which allow the holders to purchase ordinary shares at $2a share in 3 years' time. The average price of the ordinary shares throughout the year was $5a share.

What is the diluted earnings per share for the year ended 31 October 20X7?

A66.7 cents

B58.8 cents

C50.0 cents

D55.6 cents

Show Suggested Answer

Suggested Answer: D

by Felicitas at Sep 19, 2024, 01:25 AM

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Rikki

2 months ago

I'm not sure, but I think the diluted earnings per share will be lower than the basic earnings per share.

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Mitsue

2 months ago

I agree with Loren, because the share options will dilute the earnings per share.

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3 months ago

I agree with Matthew. The diluted earnings per share is the most accurate measure of the company's profitability, as it takes into account the potential increase in the number of shares outstanding.

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King

2 months ago

I agree with you, C) 50.0 cents seems right.

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Gussie

2 months ago

C) 50.0 cents

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Catalina

2 months ago

I think the answer is B) 58.8 cents.

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Tanesha

2 months ago

A) 66.7 cents

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Matthew

3 months ago

The correct answer is D) 55.6 cents. The diluted earnings per share is calculated by taking the profit after tax and dividing it by the diluted number of shares, which includes the share options.

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Dottie

2 months ago

Actually, the correct answer is D) 55.6 cents.

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Francene

3 months ago

I think the answer is A) 66.7 cents.

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