Alciatore Company reported a net income of $150,000 in 2021. The weighted-average number of common shares outstanding
Question:
Alciatore Company reported a net income of $150,000 in 2021. The weighted-average number of common shares outstanding for 2021 was 40,000. The average stock price for 2021 was $33. Assume an income tax rate of 25%.
Required:
For each of the following independent situations, indicate whether the effect of the security is antidilutive for diluted EPS.
1. 10,000 shares of 7.7% of $100 par convertible, cumulative preferred stock. Each share may be converted into two common shares.
2. 6.4% convertible 10-year, $500,000 of bonds, issued at face value. The bonds are convertible to 5,000 shares of common stock.
3. Stock options exercisable at $30 per share after January 1, 2023.
4. Warrants for 1,000 common shares with an exercise price of $35 per share.
5. A contingent agreement to issue 5,000 shares of stock to the company president if net income is at least $125,000 in 2022.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas