Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The table below shows a partial view of Webster Corporation's balance sheet. Notes and Assumptions December 31, 2020 a) Options were granted in December 2019
The table below shows a partial view of Webster Corporation's balance sheet. Notes and Assumptions December 31, 2020 a) Options were granted in December 2019 to purchase 50,000 shares of common stock at $20 per share. The average market price of common stock during 2020 was $25 per share. All options are still outstanding at the end of 2020. b) Both the 8 percent and 11 percent convertible bonds were issued in 2019 at face value. Each convertible bond is convertible into 30 shares of common stock. (Each bond has a face value of $1,000.) c) The 5 percent cumulative, convertible preferred stock was issued at the beginning of 2020 at par. Each share of preferred is convertible into two shares of common stock. d) The average income tax rate is 20 percent. e) 1,000,000 shares of common stock were outstanding during the entire year. f) Preferred dividends were not declared in 2020 . g) Net income was $3,250,000 in 2020 . h) No bonds or preferred stock were converted during 2020 . Instructions: Calculate basic and diluted EPS for the year ended December 31, 2020
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