Gaslight Ltd has earnings after tax of $1 260 000 for the year ended 30 June 2015.At the beginning of the period Gaslight had 570 000 fully paid-up ordinary shares on issue.On 30 December 2014 the company made a one-for-two bonus issue.The last sale price of the shares immediately prior to the bonus issue was $4.50 each.What are the earnings per share taking into account the bonus issue?

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The bonus issue increases the number of shares without raising additional capital, effectively diluting the earnings per share. Initially, there were 570,000 shares. The one-for-two bonus issue adds 285,000 shares (570,000 / 2), resulting in a total of 855,000 shares. The earnings per share (EPS) is calculated as earnings after tax divided by the total number of shares: $1,260,000 / 855,000 = $1.47.

Gaslight Ltd Has Earnings After Tax of $1 260 000