Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Concord Inc. had net income for the current year ending December 31, 2020 of $908,220. During the entire year, there were 509,000 common shares outstanding.

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Concord Inc. had net income for the current year ending December 31, 2020 of $908,220. During the entire year, there were 509,000 common shares outstanding. The company had two classes of preferred shares outstanding: the Class A preferred shares were $1.88 cumulative shares of which 12,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 103,000 $4.88 Class B non- cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Concord had outstanding a $1,000,000, 6% bond issued in 2009 that was convertible to 22,000 common shares. The company also had outstanding a $1,000,000, 5% bond issued in 2010 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Concord's tax rate is 37%. Determine an incremental per share effect for 2009 bonds. (Round earnings per share to 3 decimal places, e.. 15.257.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security 2009 Bonds Calculate the after-tax interest pald on the 2010 bonds. After-tax interest on 2010 bonds converted $ Determine an incremental per share effect for 2010 bonds. (Round earnings per share to 3 decimal places, s. 15.257.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security 896 Bonds Determine an incremental per share effect for Class A preferred shares. (Round earnings per share to 2 decimal places, s. 15.25.) Incremental Numerator Effect Incremental Denominator Effect Potentially dilutive security Class A preferred shares Determine an incremental per share effect for Class B preferred shares. (Round earnings per share to 2 decimal places. 15.25.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security Class B preferred shares Rank the potentially dilutive securities from most dilutive to least dilutive. 2009 bonds 2010 bonds Class A preferred shares Class B preferred shares Rank 1 Rank 2 Rank 3 Anti lutive Calculate diluted earnings per share. (Round calculations of EPS to 3 decimal places, eg. 15.25.) $3.545 and provide final answer to 2 decimal places Numerator Basic Sub Total Sub Total 2009 bonds 2010 bonds Class A preferred shares Claus preferred shares Diluted EPS

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Automotive Process Audits Preparations And Tools Practical Quality Of The Future

Authors: D. H. Stamatis

1st Edition

036775939X, 978-0367759391

More Books

Students also viewed these Accounting questions