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The following information is used in answering questions 1 4 - 2 0 . Dr . Pepper Inc. has gathered the following information to be
The following information is used in answering questions
Dr Pepper Inc. has gathered the following information to be used in developing its Earnings Per Share presentation for its annual
financial statements dated December YR Net Income for the year is $ and the income tax rate is Other relevant
information for the year includes:
Common $ par value common stock; shares authorized; shares issued and shares
Stock: outstanding at YR
The company began the year with shares issued and outstanding. On YR an additional shares
were issued for cash. On YR the company purchased and retired shares. Finally, on the
company declared a for stock split effective
Convertible $ of convertible bonds are outstanding at YR The year bonds are dated YR
Bonds:
Unvested A total of Series A stock options with an exercise price of $ were granted to officers on YR
Options: The service period for these options is four years months and the total compensation expense is $
At YR these options have not yet vested and no forfeitures have occurred. Once the options vest,
upon payment of $ each option is convertible into one share of common stock.
Preferred $ par value, cumulative preferred stock; shares authorized; shares issued and shares
Stock: outstanding at YR
This issue of preferred stock is not convertible into common stock. This preferred stock was issued during the
year ended YR Dividends were last declared and paid for the year ended YR Dividends for
both YR and YR have not been declared or paid. On YR the company purchased shares to be
held as treasury stock.
Market Prices During YR the common stock price averaged $ and ended at $ per share on YR
of Securities: Also, during YR the market price of the options averaged $ and ended at $ per option on
YR
For the year ended December YR the weighted average common shares outstanding was round to nearest whole share:
a cs b cs c cs d cs e None of the above
What amount of preferred dividends will be used in computing the numerator of Simple EPS?
a $ b $ c $ d $ e None of the above
Simple EPS for the year ended YR is round to nearest penny:
a $ b $ c $ d $ e None of the above
In the preliminary calculation of Diluted EPS what is the dollar amount of the adjustment to Income Available for Common
numerator effect for the convertible bonds?
Do not consider whether the bonds are dilutive, round to nearest dollar.
a $ b $ c $ d $ e None of the above
In the preliminary calculation of Diluted EPS what number of additional common shares is used to adjust Weighted Average
Common Shares Outstandingdenominator effect for the convertible bonds?
Do not consider whether the bonds are dilutive, round to nearest whole share.
a cs b cs c cs d cs e None of the above
In the preliminary calculation of Diluted EPS what number of additional common shares is used to adjust Weighted Average
Common Shares Outstandingdenominator effect for the Series A Stock Options?
Do not consider whether the options are dilutive, round to nearest whole share.
a cs b cs c cs d cs e None of the above
For this question you are asked to determine what amount the company would report for Diluted EPS for the year ended
YR To avoid the effect of carryforward errors if any in your prior answers use the following values
in computing Diluted EPS.
Description
Assumed Correct Value For Purposes
of Answering Question
Net Income Loss $
Weighted Average Common Shares Outstanding question cs
Preferred Dividends question $
Bond Numerator Effect question $
Bond Denominator Effect question cs
Option Denominator Effect question cs
Given these figures, the company would report Diluted EPS of round to nearest penny:
a $ b $ c $ d $ e None of the above.
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