Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need hep with calulating teh earning per share spreadsheet. Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate

I need hep with calulating teh earning per share spreadsheet.

Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate
that it will enable them to earn an additional $600,000 after tax. What would be the impact on
earnings per share if the raise the $1,000,000 by:
a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share
can be coverted into 10 shares of Peyton common stock?
b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into?
5 shares of Peyton common stock?
c) $500,000 of each of the above?
Net Income
Less: Preferred Dividends
Earnings Available to Common Shareholders
Common Shares Outstanding
Basic EPS
a If all preferred shares are converted:
Net Income
Additional Common Shares
Common Shares Outstanding after conversion
EPS if preferred shares converted
Preferred shares are antidilutive
b If all bonds are converted:
Net Income
Less: Preferred Dividends
Add back interest on bonds, net of income tax
Earnings Available to Common Shareholders
Additional Common Shares
Common Shares Outstanding after conversion

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

Step: 3

blur-text-image

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

Auditing a business risk appraoch

Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston

6th Edition

9780324645095, 324645090, 978-0324375589

More Books

Students also viewed these Accounting questions