Question
Marin Horizon Corp had the following items, all of which were outstanding throughout the entire fiscal year ending September 30, 2021: 750,000 common shares 290,000
Marin Horizon Corp had the following items, all of which were outstanding throughout the entire fiscal year ending September 30, 2021:
750,000 common shares | ||
290,000 $3 cumulative, no-par value preferred shares | ||
Options to purchase 110,000 common shares at $11 per share. The average market price of Marins common shares during the year was $20 per share. None of the options were exercised or expired during fiscal 2021 | ||
9% bond with a face value of $2,100,000, convertible to 54,000 common shares. |
Marins net income for fiscal 2021 was $8,182,500, and its tax rate was 15%. Preferred dividends had been paid in all previous fiscal years.
Calculate the income effect of the dividends on preferred shares.
Dividends on preferred shares | $Enter your answer in accordance to the question statement |
eTextbook and Media
Calculate Marins basic earnings per share for the year. (For simplicity, ignore the requirement to record the debt and equity portions of the convertible bond separately). (Round answer to 2 decimal places, e.g. 15.25.)
Basic earnings per share | $Enter your answer in accordance to the question statement |
eTextbook and Media
Calculate the after-tax interest paid on the 9% bonds.
After-tax interest on bonds converted | $Enter your answer in accordance to the question statement |
eTextbook and Media
Determine an incremental per share effect for 9% bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.)
Potentially dilutive security | Incremental Numerator Effect | Incremental Denominator Effect | EPS | |||
9% Bonds | $ | $ |
eTextbook and Media
Calculate the proceeds from assumed exercise of options.
Proceeds from exercise of options | $ |
Calculate the incremental shares oustanding upon the exercise of options.
The incremental shares oustanding upon the exercise of options |
eTextbook and Media
Rank the potentially dilutive securities from most dilutive to least dilutive.
9% bonds | Rank 1Rank 2Anti-dilutive | |
Options | Rank 1Rank 2Anti-dilutive |
eTextbook and Media
Calculate Marins diluted earnings per share for the year. (Round calculations of EPS to 3 decimal places, e.g. $3.545 and provide final answer to 2 decimal places, e.g. 15.25.)
Numerator | Denominator | EPS | |||||
Basic EPS | $ | $ | |||||
9% bondsOptions | |||||||
Sub Total | $ | ||||||
9% bondsOptions | |||||||
Sub Total | $ | $ |
Diluted EPS |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started