QUESTION 1 SECTION 1 The Eubanks Corporation held the following potentially dilutive contracts at some point during the fiscal year ended December 31, YR7 Security Par Face Amount Date Issued Conversion Terms 8% convertible bonds issued at par $2,000,000 11 YRS 20 shares of common stock for each $1,000 bond 6% coevertible, cumulative and nonparticipating preferred stock $3,000,000 11 YRI 3 shares of common stock for each $1,000 of preferred stock convertible bonds of issued at par $1,500,000 11/YR6 40 shares of common stock for each $1,000 bond Stock options to purchase 50,000 shares of Common stock at $20 per share (options were granted in YRA and became fully vested in YR6) Average common stock price during YR7 is $25 per share The convertible bonds mature 5 years from the inte dete, and were sold when the market rate for these bonds was 8% Interest on these bonds is payable semi-annually. The company uses the effective interest method to amortize the discount associated with this bond. Net Income for YR7 - $1,200,000 Tax rate for YRT -40 No dividends were declared in YR 7. On January 1, YR7,600,000 shares of Eubanks Corporation common stock were outstanding. Os February 1, YR7, the firm inued an additional 100,000 shares of common stock On November 1, YR7, the firm repurchased 75,000 shares as treasury stock, and on December 1, YR7, the firm declared a 20. stock dividend Cakulate weighted average common shares outstanding. Note 1. Do NOT wse a comma thousands separator). Note 2. Only put a numerator for months" column Date Shares Adj Factor Months WA Common Shares Outstanding 11-21 12 12 21-111 111-121 12 121-1231 12 Question Completion Status: QUESTION 2 Calculate Basic EPS. Round EPS numbers up to the nearest penny. Note 1. Do NOT use a comma (thousands separator). 1 QUESTION 3 Calculate an ME for for the 8% convertible bonds. Note: Do NOT use a comma (thousands separator). QUESTION 4 Calculate an ME for for the 6% convertible, cumulative, nonparticipating preferred stock. Note: Do NOT use a comma (thousands separator). QUESTION 5 QUESTION 1 SECTION 1 The Eubanks Corporation held the following potentially dilutive contracts at some point during the fiscal year ended December 31, YR7 Security Par Face Amount Date Issued Conversion Terms 8% convertible bonds issued at par $2,000,000 11 YRS 20 shares of common stock for each $1,000 bond 6% coevertible, cumulative and nonparticipating preferred stock $3,000,000 11 YRI 3 shares of common stock for each $1,000 of preferred stock convertible bonds of issued at par $1,500,000 11/YR6 40 shares of common stock for each $1,000 bond Stock options to purchase 50,000 shares of Common stock at $20 per share (options were granted in YRA and became fully vested in YR6) Average common stock price during YR7 is $25 per share The convertible bonds mature 5 years from the inte dete, and were sold when the market rate for these bonds was 8% Interest on these bonds is payable semi-annually. The company uses the effective interest method to amortize the discount associated with this bond. Net Income for YR7 - $1,200,000 Tax rate for YRT -40 No dividends were declared in YR 7. On January 1, YR7,600,000 shares of Eubanks Corporation common stock were outstanding. Os February 1, YR7, the firm inued an additional 100,000 shares of common stock On November 1, YR7, the firm repurchased 75,000 shares as treasury stock, and on December 1, YR7, the firm declared a 20. stock dividend Cakulate weighted average common shares outstanding. Note 1. Do NOT wse a comma thousands separator). Note 2. Only put a numerator for months" column Date Shares Adj Factor Months WA Common Shares Outstanding 11-21 12 12 21-111 111-121 12 121-1231 12 Question Completion Status: QUESTION 2 Calculate Basic EPS. Round EPS numbers up to the nearest penny. Note 1. Do NOT use a comma (thousands separator). 1 QUESTION 3 Calculate an ME for for the 8% convertible bonds. Note: Do NOT use a comma (thousands separator). QUESTION 4 Calculate an ME for for the 6% convertible, cumulative, nonparticipating preferred stock. Note: Do NOT use a comma (thousands separator). QUESTION 5
