ACCT 3230- Fall 2018 Problem Set #2 Due Date: 9 November 2018; Friday, 5 pm; Paper submission only I. Earnings Per Share Calculations (22 points) Curse of the Bambino Entertainment (CotBE) had the following securities outstanding and other information for 2017: Preferred Stock: Issue A Preferred Stock, cumulative and nonconvertible, 4%, $100 par. $1,000,000 Dividend payments are in arrears for three (3) years. Issue B Preferred Stock, non-cumulative and convertible, 5%, $100 par $4,000,000 Conversion rate is 4 common shares for every preferred share. Common Stock: Class A Common Stock, S1 par, 5,000,000 shares authorized, 1,000,000 shares issued and outstanding at January 1, 2017 $1,000,000 Issued 30,000 shares on March 1, 20117 Repurchased 150,000 shares on April 1,2017 Repurchased 60,000 shares on July 1, 2017 Sold 90,000 of repurchased (treasury) shares on September 1, 2017 Stock Warrants- warrants are exchangeable for 100,000 common shares. The warrants were issued on October 1, 2016 and have a $16 exercise price per warrant. Stock Options- CotBE's issued 100,000 stock options to key executives on January 1, 2017 which vest on December 31, 2019 and have an exercise price of $18 per option. Convertible Bonds-6% Convertible Bonds of$6,000,000 were sold at par value on July 1, 2017 Each $1,000 of bond is convertible into 120 shares of common stock. Other Information: .Net Income for 2017 was $1,600,000 Income Tax Rate was 25% for 2017 CotBE's declared and paid a cash dividend of $200,000 on common stock during 2017. . The average market price per share during 2017 was $20. Required - Calculate CotBE's Basic and Diluted EPS for the year ended December 31, 2017, show all calculations. ACCT 3230- Fall 2018 Problem Set #2 Due Date: 9 November 2018; Friday, 5 pm; Paper submission only I. Earnings Per Share Calculations (22 points) Curse of the Bambino Entertainment (CotBE) had the following securities outstanding and other information for 2017: Preferred Stock: Issue A Preferred Stock, cumulative and nonconvertible, 4%, $100 par. $1,000,000 Dividend payments are in arrears for three (3) years. Issue B Preferred Stock, non-cumulative and convertible, 5%, $100 par $4,000,000 Conversion rate is 4 common shares for every preferred share. Common Stock: Class A Common Stock, S1 par, 5,000,000 shares authorized, 1,000,000 shares issued and outstanding at January 1, 2017 $1,000,000 Issued 30,000 shares on March 1, 20117 Repurchased 150,000 shares on April 1,2017 Repurchased 60,000 shares on July 1, 2017 Sold 90,000 of repurchased (treasury) shares on September 1, 2017 Stock Warrants- warrants are exchangeable for 100,000 common shares. The warrants were issued on October 1, 2016 and have a $16 exercise price per warrant. Stock Options- CotBE's issued 100,000 stock options to key executives on January 1, 2017 which vest on December 31, 2019 and have an exercise price of $18 per option. Convertible Bonds-6% Convertible Bonds of$6,000,000 were sold at par value on July 1, 2017 Each $1,000 of bond is convertible into 120 shares of common stock. Other Information: .Net Income for 2017 was $1,600,000 Income Tax Rate was 25% for 2017 CotBE's declared and paid a cash dividend of $200,000 on common stock during 2017. . The average market price per share during 2017 was $20. Required - Calculate CotBE's Basic and Diluted EPS for the year ended December 31, 2017, show all calculations
