Answered step by step
Verified Expert Solution
Question
1 Approved Answer
21. The following intormation was taken from the books and records of Eurton Corp 1. Net income, 2017 $ 4,500 2. Capital structure: a. Convertible
21. The following intormation was taken from the books and records of Eurton Corp 1. Net income, 2017 $ 4,500 2. Capital structure: a. Convertible bonds: 30 bonds issued and outstanding. Each $100 par value bond is convertible into 10 shares of common. b. Noncumulative $50 par value preferred stock, 20 shares outstanding C. Common stock, $1 par, 2,000 shares issued and outstanding $ 3.000 $1,000 $ 2,000 3. Other data: a. The bonds, preferred, and common shares were outstanding for all of 2017. b. None of the bonds were converted during the year. c. The income tax rate is 30%. d. The bonds carry a 5% interest rate ($150 total per year). e. Preferred has a 4% annual dividend requirement. No dividends are in arrears. f. Dividends paid during 2017: Preferred $40; Common $120. a. Compute basic and diluted earnings per share for 2017. Carry all answers to three decimal places. Basic EPS b. Find diluted earnings per share for 2017, now assuming that the convertible debt was issued on December 01, 2017. All other facts remain unchanged. (5 pts) Diluted EPS Calculations: 21. The following intormation was taken from the books and records of Eurton Corp 1. Net income, 2017 $ 4,500 2. Capital structure: a. Convertible bonds: 30 bonds issued and outstanding. Each $100 par value bond is convertible into 10 shares of common. b. Noncumulative $50 par value preferred stock, 20 shares outstanding C. Common stock, $1 par, 2,000 shares issued and outstanding $ 3.000 $1,000 $ 2,000 3. Other data: a. The bonds, preferred, and common shares were outstanding for all of 2017. b. None of the bonds were converted during the year. c. The income tax rate is 30%. d. The bonds carry a 5% interest rate ($150 total per year). e. Preferred has a 4% annual dividend requirement. No dividends are in arrears. f. Dividends paid during 2017: Preferred $40; Common $120. a. Compute basic and diluted earnings per share for 2017. Carry all answers to three decimal places. Basic EPS b. Find diluted earnings per share for 2017, now assuming that the convertible debt was issued on December 01, 2017. All other facts remain unchanged. (5 pts) Diluted EPS Calculations
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