10. Chapter 19 Problem EVA has Net income totaling $300 million in YR2. On 1/1/YR2 the company had 100 million shares outstanding. The company issues 32 million shares on 04/1/YR2. The company split the share 2-1 on 10/01/YR2. On 12/1/Y the company acquired 24 million shares Of treasury stock at a price of $50/share. In addition to the common equity the company has 2 million shares of $100 par cumulative, convertible preferred stock outstanding. Each preferred share is convertible into 10 common shares. The preferred dividend is $10 per shar. Other Potentially dilutive securities in the capital structure: 20 million stock options. Exercise price of $20. Average stock price of $50. $300 million in 10% bonds that are convertible into 40 million common shares. a. C. What is the weighted average number of shares outstanding in 2018 (this is the number of shares in the denominator required to calculate basic earnings per share)? b. What is the numerator required to calculate basic earnings per share (BEPS)? What is BEPS? d. To calculate fully diluted earnings per share (FDEPS), I. What is the denominator effect for the stock options? II. What is the numerator effect for the convertible bonds (tax rate of 20%? III. What is the denominator effect of the convertible bonds? IV. What is the numerator effect for the convertible preferred stock? V. What is the denominator effect for the convertible preferred stock? What is fully diluted earnings per share? e. 10. Chapter 19 Problem EVA has Net income totaling $300 million in YR2. On 1/1/YR2 the company had 100 million shares outstanding. The company issues 32 million shares on 04/1/YR2. The company split the share 2-1 on 10/01/YR2. On 12/1/Y the company acquired 24 million shares Of treasury stock at a price of $50/share. In addition to the common equity the company has 2 million shares of $100 par cumulative, convertible preferred stock outstanding. Each preferred share is convertible into 10 common shares. The preferred dividend is $10 per shar. Other Potentially dilutive securities in the capital structure: 20 million stock options. Exercise price of $20. Average stock price of $50. $300 million in 10% bonds that are convertible into 40 million common shares. a. C. What is the weighted average number of shares outstanding in 2018 (this is the number of shares in the denominator required to calculate basic earnings per share)? b. What is the numerator required to calculate basic earnings per share (BEPS)? What is BEPS? d. To calculate fully diluted earnings per share (FDEPS), I. What is the denominator effect for the stock options? II. What is the numerator effect for the convertible bonds (tax rate of 20%? III. What is the denominator effect of the convertible bonds? IV. What is the numerator effect for the convertible preferred stock? V. What is the denominator effect for the convertible preferred stock? What is fully diluted earnings per share? e
