Homework Answers
| a. Calculation of weighted average no. of shares available for calulating basic EPS | ||||
| Step 1: Adjust the pre-dividend number of shares to post-dividend number of shares | ||||
| This will be done by multiplying the number of shares prior to declaring dividends by 1.1 (10% dividend). | ||||
| Date | Particulars | No. of shares | Adjustment | Post Adjustment of Dividend |
| 1.1.19 | Opening | 200,000.00 | =200000*1.1 | 220,000.00 |
| 1.4.19 | Newly Issued | 16,000.00 | =16000*1.1 | 17,600.00 |
| 1.9.19 | Buy Back | (20,000.00) | (No Adjustment) | (20,000.00) |
| Step 2: Calculate the Total Weighted Average Common Shares | ||||
| Months shares are ouTstanding | Shares Outstanding | Fraction of Year Outstanding | Equivalent Whole Units | |
| Jan-Mar | 220,000.00 | 3/12 | 55,000.00 | |
| Apr-Aug | 237,600.00 | 5/12 | 99,000.00 | |
| Sep-Dec | 217,600.00 | 4/12 | 72,533.33 | |
| Total Weighted average Common Shares… | 226,533.33 | |||
| b. | ||||
| Computation of basic EPS | ||||
| EBIT | $ 750,000.00 | |||
| Less: Interest on Bonds | ||||
| (6000000*4%) | $ (240,000.00) | |||
| EBT | $ 510,000.00 | |||
| Less: tax @ 40% | $ (204,000.00) | |||
| EAT | $ 306,000.00 | |||
| Less: Preference dividend | ||||
| (10000*6) | $ (60,000.00) | |||
| Earnings avialable for equity shareholders | $ 246,000.00 | |||
| Basic EPS | ||||
| =Earnings available for equity sharehlders/Weighted average no. of Shares | ||||
| =246000/226533.33 | ||||
| $ 1.09 | ||||
| C. | ||||
| calculation of no. of shares to be used for Diluted EPS | ||||
| Diluted Shares | ||||
| Preference shares | =10000*2 | 20000 | ||
| Debentures | =(6000000/1000)*10 | 60000 | ||
| Total | 80000 | |||
| no. of shares to be used for Diluted EPS | =Average outstanding Shares+Diluted Shares | |||
| =226533.33+80000 | ||||
| 306,533.33 | ||||
| D. | ||||
| Diluted EPS=Earnings available for Equity Shareholders/(Average outstanding Shares+Diluted Shares) |
=246000/(226533.33+80000) |
0.802522845 | ||
Add Answer to:
3. Dulcinea Corporation had $750,000 of net income in 2019. On January 1, 2019, there were...
Testbank Problem 145 Sandhill Corp. had $750,000 net income in 2021. On January 1, 2021 there...
Testbank Problem 145 Sandhill Corp. had $750,000 net income in 2021. On January 1, 2021 there were 200,000 shares of common stock outstanding. On April 1, 23,200 shares were issued and on September 1, Sandhill bought 29,400 shares of treasury stock. There are 28,000 options to buy common stock at $40 a share outstanding. The market price of the common stock averaged $50 during 2021. The tax rate is 40%. During 2021, there were 41,000 shares of convertible preferred stock...
Giovanni Corp. had $1,000,000 net income in 2021. On January 1, 2021 there were 200,000 shares...
Giovanni Corp. had $1,000,000 net income in 2021. On January 1, 2021 there were 200,000 shares of common stock outstanding. There are 30,000 options to buy common stock at $40 a share outstanding. The market price of the common stock averaged $50 during 2021. The tax rate is 30%. During 2021, there were 40,000 shares of preferred stock outstanding. The preferred is $100 par, pays $3.50 a year dividend. Giovanni issued $2,000,000 of 8% convertible bonds at face value during...
The information below pertains to Barkley Company for 2021. Net income for the year $1,200,000 7%...
The information below pertains to Barkley Company for 2021. Net income for the year $1,200,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 2,000,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,000,000 Common stock, $10 par value 6,000,000 Tax rate for 2021 20% Average market price of common stock $25 per share There were no changes during 2021...
On January 1, 2018 Tonge Industries had outstanding 660,000 common shares ($1 par) that originally sold for $30 per share, and 9,000 shares of 10% cumulative preferred stock ($100 par), convertible i...
On January 1, 2018 Tonge Industries had outstanding 660,000 common shares ($1 par) that originally sold for $30 per share, and 9,000 shares of 10% cumulative preferred stock ($100 par), convertible into 90,000 common shares. On October 1, 2018, Tonge sold and issued an additional 16,000 shares of common stock at $33. At December 31, 2018, there were 25,000 incentive stock options outstanding, issued in 2017, and exercisable after one year for 25,000 shares of common stock at an exercise...
Ahnberg Corporation had 820.000 shares of common stock issued and outstanding at January 1, No common...
Ahnberg Corporation had 820.000 shares of common stock issued and outstanding at January 1, No common shares were issued during the year, but on January 1, Ahnberg issued 440,000 shares of convertible preferred stock. The preferred shares are convertible Into 880.000 shares of common stock. During the year Ahnberg paid $264,000 cash dividends on the preferred stock. Net Income was $3.790,000 What were Ahnberg's basic and diluted earnings per share for the year? (Round your answers to 2 decimal places.)...
The information below pertains to Flint Company for 2018. $1,180,000 1,910,000 Net income for the year...
The information below pertains to Flint Company for 2018. $1,180,000 1,910,000 Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2018 Average market price of common stock 3,820,000 5,850,000 40% $25 per share There were no changes during 2018...
During 2019, Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2019,...
During 2019, Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2019, the company issued 10,000, 7% convertible bonds at par. The maturity value of each bond is $1,000. Each bond is convertible into 20 shares of common stock. None were converted during 2019. Dawson also had 60,000 stock warrants outstanding for all of 2019. The option price is $10 per share. The market price of the common stock was $40 on December 31, 2019, and...
Sunland Corporation had net income of $50,500 for the year ended December 31, 2020, and a...
Sunland Corporation had net income of $50,500 for the year ended December 31, 2020, and a weighted average number of common shares outstanding of 12,400. The following information is provided regarding the capital structure: 1. 8% convertible debt, 260 bonds each convertible into 42 common shares. The bonds were outstanding for the entire year. The income tax rate is 40%. The bonds were issued at par ($1,150 per bond). No bonds were converted during the year. 2. 3% convertible, cumulative...
Problem 16-8 The information below pertains to Indigo Company for 2018. $1,140,000 1,900,000 Net income for...
Problem 16-8 The information below pertains to Indigo Company for 2018. $1,140,000 1,900,000 Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2018 Average market price of common stock 3,870,000 5,700,000 40% $25 per share There were no changes...
1. 2.. On December 31, 2017, Berclair Inc. had 300 million shares of common stock and...
1.
2..
On December 31, 2017, Berclair Inc. had 300 million shares of common stock and 13 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 30 million shares of its common stock as treasury stock. Berclair issued a 4% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $650 million. Also outstanding...
On January 1, 2018 Tonge Industries had outstanding 660,000 common shares ($1 par) that originally sold for $30 per share, and 9,000 shares of 10% cumulative preferred stock ($100 par), convertible into 90,000 common shares. On October 1, 2018, Tonge sold and issued an additional 16,000 shares of common stock at $33. At December 31, 2018, there were 25,000 incentive stock options outstanding, issued in 2017, and exercisable after one year for 25,000 shares of common stock at an exercise...
Ahnberg Corporation had 820.000 shares of common stock issued and outstanding at January 1, No common shares were issued during the year, but on January 1, Ahnberg issued 440,000 shares of convertible preferred stock. The preferred shares are convertible Into 880.000 shares of common stock. During the year Ahnberg paid $264,000 cash dividends on the preferred stock. Net Income was $3.790,000 What were Ahnberg's basic and diluted earnings per share for the year? (Round your answers to 2 decimal places.)...
The information below pertains to Flint Company for 2018. $1,180,000 1,910,000 Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2018 Average market price of common stock 3,820,000 5,850,000 40% $25 per share There were no changes during 2018...
During 2019, Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2019, the company issued 10,000, 7% convertible bonds at par. The maturity value of each bond is $1,000. Each bond is convertible into 20 shares of common stock. None were converted during 2019. Dawson also had 60,000 stock warrants outstanding for all of 2019. The option price is $10 per share. The market price of the common stock was $40 on December 31, 2019, and...
Problem 16-8 The information below pertains to Indigo Company for 2018. $1,140,000 1,900,000 Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2018 Average market price of common stock 3,870,000 5,700,000 40% $25 per share There were no changes...
1.
2..
On December 31, 2017, Berclair Inc. had 300 million shares of common stock and 13 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 30 million shares of its common stock as treasury stock. Berclair issued a 4% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $650 million. Also outstanding...
Most questions answered within 3 hours.
-
i need help on this
Chapter 9 Section 3 Question 1:
Rudy puts this poster, with...
asked 7 minutes ago -
True or false Assembly x86
41. _____ The program counter is a pointer to the
instruction....
asked 7 minutes ago -
You have conducted an experiment to try to demonstrate that
growth factor receptor X protein (GFRX)...
asked 22 minutes ago -
The Gross Profit ratio for 2014 is 57.07%
Assume that Campbell's net sales for the first...
asked 22 minutes ago -
Thoroughly discuss the various current and proposed solutions to
anthropogenic influences resulting in Global Climate Change....
asked 26 minutes ago -
BLOG EXERCISE: You are writing a weekly intranet blog for the
CEO of a large Canadian...
asked 29 minutes ago -
calculate ΔGrxn at 36 ∘C. N2O4(g)→2NO2(g)
asked 29 minutes ago -
Present and Future Values of Single Cash Flows for Different
Periods
Find the following values, using...
asked 32 minutes ago -
Which types of mutations in DNA can lead to the translation of a
non-functional protein product?...
asked 31 minutes ago -
Many structures are composed of individual elements that react
in unison when forces are applied. the...
asked 33 minutes ago -
Work of 1950 J is done by stirring a perfectly insulated beaker
containing 75 g of...
asked 1 hour ago -
The neighborhood kids set up an outdoor lemonade stand in
Maryland in June. They find that...
asked 1 hour ago