Port Harcourt Energy Plc had 40,000,000 ordinary shares of 50 kobo each in issue on 1 January 2023. On 1 April 2023, the company made a rights issue of 1 for 4 at ₦2.20 per share. The market price immediately before the rights issue was ₦3.00 per share. For the purpose of computing basic earnings per share under IAS 33, what is the theoretical ex-rights price (TERP) per share?

TERP is calculated as: [(4 shares × ₦3.00) + (1 share × ₦2.20)] ÷ 5 = [₦12.00 + ₦2.20] ÷ 5 = ₦14.20 ÷ 5 = ₦2.84. The bonus fraction (used to restate the pre-rights EPS denominator) is the market price before rights divided by TERP: ₦3.00 ÷ ₦2.84. This approach is required by IAS 33 paragraphs 26–29 to reflect the bonus element embedded in a rights issue priced below market value.