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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 200,000 shares:
Calculating EPS and Multiple Securities
At the end of 2020, the records of Wolverine Corporation reflected the following.
Common stock, $10 par; authorized 200,000 shares: issued and outstanding throughout the year, | |||
100,000 shares | $1,000,000 | ||
Preferred stock, $50 par, 7%, cumulative, convertible into common stock, share for share; | |||
authorized, 20,000 shares; issued and outstanding throughout year, 4,000 shares | 200,000 | ||
Contributed capital in excess of par, common stock | 160,000 | ||
Retained earnings (no dividends declared during the year) | 940,000 | ||
Bonds payable, 10% nonconvertible, issued at par in 2016 | 300,000 | ||
Net income | 264,000 | ||
Stock options outstanding (all year for 20,000 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?
b. Compute the required EPS amounts.
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