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Drop downs indicate Yes or No Analyzing EPS Match each term, 1 through 12 with its impact on the EPS calculation. Assume a simple capital
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Analyzing EPS Match each term, 1 through 12 with its impact on the EPS calculation. Assume a simple capital structure unless the scenario indicates otherwise. Ignore the possibility of antidilutive securities and the initial impact on net income of a particular transaction. A scenario may have more than one impact on the EPS calculation. Scenario 1. Noncumulative, 7% preferred stock dividend with no dividend declaration. 2. Cumulative, 74 preferred stock dividend with no dividend declaration, 3. Issuance of stock options. 4. Retirement of common shares. 5. Stock dividend declared during the year. 6. Stock dividend declared after the calender year but before financial statements are issued. 7. Stock split 8. Issuance of convertible noncumulative preferred stock with no dividend declaration. 9. Issuance of convertible bonds. 10. Conditions for issuance are met for unisssued contingent shares 11. Purchase of shares for the treasury. 12. Granting of restricted common stock (not vested). Effects numerator Effects denominator Effects numerator Effects denominator Scenario in Basic EPS calculation in Basic EPS calculation in Diluted EPS calculation in diluted EPS calculation + No impact on EPS calculation + . A 5 6 + 9 10 11 12 Analyzing EPS Match each term, 1 through 12 with its impact on the EPS calculation. Assume a simple capital structure unless the scenario indicates otherwise. Ignore the possibility of antidilutive securities and the initial impact on net income of a particular transaction. A scenario may have more than one impact on the EPS calculation. Scenario 1. Noncumulative, 7% preferred stock dividend with no dividend declaration. 2. Cumulative, 74 preferred stock dividend with no dividend declaration, 3. Issuance of stock options. 4. Retirement of common shares. 5. Stock dividend declared during the year. 6. Stock dividend declared after the calender year but before financial statements are issued. 7. Stock split 8. Issuance of convertible noncumulative preferred stock with no dividend declaration. 9. Issuance of convertible bonds. 10. Conditions for issuance are met for unisssued contingent shares 11. Purchase of shares for the treasury. 12. Granting of restricted common stock (not vested). Effects numerator Effects denominator Effects numerator Effects denominator Scenario in Basic EPS calculation in Basic EPS calculation in Diluted EPS calculation in diluted EPS calculation + No impact on EPS calculation + . A 5 6 + 9 10 11 12Step by Step Solution
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