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Calculating EPS and Multiple Securities At the end of 2020, the records of Wolverine Corporation reflected the following. Common stock, $10 par; authorized 100,000 shares:
Calculating EPS and Multiple Securities
At the end of 2020, the records of Wolverine Corporation reflected the following.
Common stock, $10 par; authorized 100,000 shares: issued and outstanding throughout the year, | |||
50,000 shares | $500,000 | ||
Preferred stock, $50 par, 7%, cumulative, convertible into common stock, share for share; | |||
authorized, 10,000 shares; issued and outstanding throughout year, 2,000 shares | 100,000 | ||
Contributed capital in excess of par, common stock | 80,000 | ||
Retained earnings (no dividends declared during the year) | 470,000 | ||
Bonds payable, 10% nonconvertible, issued at par in 2016 | 150,000 | ||
Net income | 120,000 | ||
Stock options outstanding (all year for 10,000 shares of common stock at $15 per share) | |||
Income tax rate, 25% | |||
Average market price of the common stock during 2020, $25 per share |
Required
a. Is this a simple or a complex capital structure?
AnswerSimple structureComplex structure |
b. Compute the required EPS amounts.
- Note: Round earnings per share amounts to two decimal places.
- Note: If an amount is not required, leave the answer blank (zero).
Net Income Available to Common Stockholders | Weighted Avg. Common Shares Outstanding | Per Share | |
---|---|---|---|
Basic EPS | Answer | Answer | Answer |
Diluted EPS | Answer | Answer | Answer |
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