Gce Model Questions Vol1 2021 Financial Accounting Question 29

Practice objective / multiple choice question 29 from the 2021 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2021 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 29 GCE_MODEL_QUESTIONS_VOL1 • 2021 • FINANCIAL_ACCOUNTING • objective

XYZ Ltd has 1,000,000 ordinary shares of £1 nominal value. The profit after tax for the year is £2,500,000. The company declares an interim dividend of 5p per share and a final dividend of 10p per share. Before the final dividend is paid, a 2‑for‑1 share split is carried out, and subsequently a 25% bonus issue (1 new share for every 4 held) is made. Determine: (a) the total number of shares outstanding after the split and bonus issue; (b) the total dividend payable per original share (combining interim and final dividends) after adjusting for the split and bonus issue; (c) the earnings per share (EPS) after all adjustments.

Answer Options

A. Shares after actions 3,125,000; Total dividend per original share 15p; EPS £0.80
B. Shares after actions 2,000,000; Total dividend per original share 15p; EPS £1.25
C. Shares after actions 2,500,000; Total dividend per original share 12p; EPS £1.00
Correct Answer D. Shares after actions 2,500,000; Total dividend per original share 15p; EPS £1.00
Correct Answer
D
Correct Option:
Shares after actions 2,500,000; Total dividend per original share 15p; EPS £1.00

About This Question

This is Gce Model Questions Vol1 2021 Financial Accounting Question 29. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Hard .

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