What must I do in the mathematically and what values must I incorporate in the cells that are under the 3 questions that make up the word problem (Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate that it will enable them to earn an additional $600,000 after tax. What would be the impact on earnings per share if they raise the $1,000,000 by:)?

19 20 21 Accounts Payable Wages Payable Interest Payable Current Portion of Bonds Payable Income Taxes Currently Payable Accrued Pension Liability Accrued Employees Health Insurance Lease Liability 1,555,212.85 250,203.31 21,888.22 1,000,000.00 1,042,118.16 3 22 1,555,212.85 250,203.31 21,888.22 1,000,000.00 990,167.91 107,041.70 43,781.91 101,514.00 23 52,325.252 375.00 4 107,041.70 5 43,781.91 6a 101,514.00 24 25 26 27 28 3 52,325.25 29 30 Deferred Tax Liability Bonds Payable Preferred Stock Common Stock Beginning Retained earnings Dividends - Preferred Dividends - Common 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 52,325.25 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 31 32 33 50,000.00 5,250,000.00 50,000.00 5,250,000.00 34 A B D E G F Deferred Tax Liability H 52,325.25 16 $ 17 18 Total Current Assets $15,847,105.00 Total Current Liabilities $ 4,122,135.15 19 20 Long Term Liabilities: Bonds Payable 10%, 20 year $ 4,000,000.00 21 22 23 24 Long Term/Fixed Assets: Land $ 250,000.00 Building $ 1,250,000.00 Baking Equipment $ 2,382,654.00 Accumulated Depreciation $ (328,282.00) Net Fixed assets Total Long Term Liabilities: $ 4,000,000.00 25 26 $3,554,372.00 Total Liabilities: $ 8,122,135.15 27 28 Patent Net of Amortization $ 47,500.00 $ 500,000.00 29 30 Preferred Stock - (10,000 authorized, 5,000 issued, 10%, $100 par value) Common Stock - (2,000,000 shares authorized, 1,750,000 issued, $1 par) Retained Earnings $ 1,750,000.00 31 32 $ 9,076,841.85 33 34 Total Equity $11,326,841.85 35 Total Assets: $19,448,977.00 Total Liabilities & Equity $19,448,977.00 36 37 B G H 1 J K L M 1 HOME F Peyton Approved Earnings per Share For Year Ended 12/31/20XX 2 3 4 5 6 7 8 Net Income Less: Preferred Dividends Earnings Available to Common Shareholders Common Shares Outstanding Basic EPS $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statement for 20 $ (50,000.00) $50,000 is from ending balance of Cash dividends of Preferred stock on Trial Balance Sheet for 201 $ 12,378,719.26 Net income ($12,428,719.26) - Preferred dividends ($50,000) $12,378,719.26 $ 1,750,000.00 $1,750,000.00 is from Revised Balance Sheet for 2017 $ 7.07 Earnings Available to Common Shareholders ($12,378,719.26)/Common Shares Outstanding after 9 10 11 12 If all preferred shares are converted: 13 14 15 Net Income Additional Common Shares Common Shares Outstanding after conversion EPS if preferred shares converted Preferred shares are antidilutive $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statement for 20 $ 5,000.00 5,000 is issued shares of Preferred stock from Revised Balance Sheet for 2017 $ 1,755,000.00 Common Shares Outstanding ($1,750,000) + Additional Common Shares ($5,000) $ 7.08 Net income after income taxes ($12,428,719.26)/Common Shares Outstanding after conversion ($1, $ 16 17 18 19 20 21 22 23 24 If all bonds are converted: Net Income Less: Preferred Dividends Add back interest on bonds, net of income tax Earnings Available to Common Shareholders Additional Common Shares Common Shares Outstanding after conversion Fully diluted EPS $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statement for 20 $ (50,000,00) $50,000 is from ending balance of Cash dividends of Preferred stock on Trial Balance Sheet for 201 $ 300,000.00 $4,000,000*0.01*(1-0.25) $400,000*0.75 $ 300,000.00 $ 12,678,719.26 $12,428,719.26 - $50,000 + $300,000 $12,678,719.26 $ 4,000,000.00 $4,000,000 is dollar amount of Bonds Payable on Revised Balance Sheet for 2017 $ 5,750,000.00 Common Shares Outstanding ($1,750,000) + Additional Common Shares ($4,000,000) $ 2.20 Earnings Available to Common Shareholders ($12,678,719.26)/Common Shares Outstanding after 25 26 27 28 37 34 Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate 35 that it will enable them to earn an additional $600,000 after tax. What would be the impact on 36 earnings per share if they raise the $1,000,000 by: a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be converted into 10 shares of Peyton common stock? b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into? 5 shares of Peyton common stock? c) $500,000 of each of the above? 38 39 40 41 42 43 44 45 46 Net Income Less: Preferred Dividends Earnings Available to Common Shareholders Common Shares Outstanding Basic EPS $ $ $ $ $ 600,000.00 100,000.00 $1000,000 x 0.10 500,000.00 100,000.00 5.00 47 48 49 If all preferred shares are converted: 52 $ 600,000.00 53 Net Income Additional Common Shares Common Shares Outstanding after conversion EPS if preferred shares converted Preferred shares are antidilutive 8 8 8 9 8 8 8 X 48 57 58 b If all bonds are converted: Net Income Less: Preferred Dividends Add back interest on bonds, net of income tax 'Earnings Available to Common Shareholders Additional Common Shares Common Shares Outstanding after conversion Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate that it will enable them to earn an additional $600,000 after tax. What would be the impact on earnings per share if they raise the $1,000,000 by: a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be coverted into 10 shares of Peyton common stock? b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into? 5 shares of Peyton common stock? C) $500,000 of each of the above? a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be coverted into 10 shares of Peyton common stock? (a).-If10,000.-10%, $100 par value-convertible preferred-stock was issued by Peyton Approved, Preferred-stock Option: 1 *$600,000 is net-income (profit) after paying taxes (e.g., state and federal-income taxes) - From the above word problem in sentence three. I 1 = 10,000 outstanding shares of preferred-stock-x-$100 par value = $1,000,0009 1 *$1,000,000 -is the total market value, also called total portfolio value of an investor's portfolio containing 10,000 outstanding shares of a preferred-stock. 10%-is the dividend rate, contract dividend rate, stated dividend rate, and-annual-coupon dividend rate. I 10 100 =-0.101 = $1,000,000-~-0.101 = $100,0001 *$100,000 original, outstanding shares of convertible preferred-stock Let the original outstanding shares-of-Peyton-Approved's be 100.0009 $600,000 100,000 original outstanding shares of convertible preferred stock = $6.000 Original earnings per share is $6.00.1 10%-is the dividend rate, contract dividend rate, stated dividend rate, and-annual-coupon dividend rate. I 10 100 =-0.101 = $1,000,000-~-0.101 = $100,0001 *$100,000 original, outstanding shares of convertible preferred-stock Let the original outstanding shares-of-Peyton-Approved's be 100.0009 $600,000 100,000 original outstanding shares of convertible preferred stock = $6.000 Original earnings per share is $6.00.1 b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into? 5 shares of Peyton common stock? (b). --If-$100,000, of 8% convertible bonds was issued by Peyton-Approved. I 8% 8 100 1 =-0.089 $600,000 - $1000,000 x 0.08 100,000 original outstanding shares of convertible preferred stock $600,000 - $80,000 100,000 original outstanding shares of convertible preferred stock $520,000 100,000 original outstanding shares of convertible preferred stock = $5.21 Earnings per share is $5.20.5 C) $500,000 of each of the above? (c).-If-$500,000 preferred-stock-and-$500.000 bonds issued-by-Peyton-Approved. $600,000 - $500.000 x 0.10 - $500,000 x 0.08 100,000 original outstanding shares of convertible preferred stock $600,000 - $50,000 - $40,000 100,000 original outstanding shares of convertible preferred stock $510,000 100,000 original outstanding shares of convertible preferred stock = $5.11 Earnings per share is $5.10.1 Earnings per share would decrease. 19 20 21 Accounts Payable Wages Payable Interest Payable Current Portion of Bonds Payable Income Taxes Currently Payable Accrued Pension Liability Accrued Employees Health Insurance Lease Liability 1,555,212.85 250,203.31 21,888.22 1,000,000.00 1,042,118.16 3 22 1,555,212.85 250,203.31 21,888.22 1,000,000.00 990,167.91 107,041.70 43,781.91 101,514.00 23 52,325.252 375.00 4 107,041.70 5 43,781.91 6a 101,514.00 24 25 26 27 28 3 52,325.25 29 30 Deferred Tax Liability Bonds Payable Preferred Stock Common Stock Beginning Retained earnings Dividends - Preferred Dividends - Common 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 52,325.25 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 31 32 33 50,000.00 5,250,000.00 50,000.00 5,250,000.00 34 A B D E G F Deferred Tax Liability H 52,325.25 16 $ 17 18 Total Current Assets $15,847,105.00 Total Current Liabilities $ 4,122,135.15 19 20 Long Term Liabilities: Bonds Payable 10%, 20 year $ 4,000,000.00 21 22 23 24 Long Term/Fixed Assets: Land $ 250,000.00 Building $ 1,250,000.00 Baking Equipment $ 2,382,654.00 Accumulated Depreciation $ (328,282.00) Net Fixed assets Total Long Term Liabilities: $ 4,000,000.00 25 26 $3,554,372.00 Total Liabilities: $ 8,122,135.15 27 28 Patent Net of Amortization $ 47,500.00 $ 500,000.00 29 30 Preferred Stock - (10,000 authorized, 5,000 issued, 10%, $100 par value) Common Stock - (2,000,000 shares authorized, 1,750,000 issued, $1 par) Retained Earnings $ 1,750,000.00 31 32 $ 9,076,841.85 33 34 Total Equity $11,326,841.85 35 Total Assets: $19,448,977.00 Total Liabilities & Equity $19,448,977.00 36 37 B G H 1 J K L M 1 HOME F Peyton Approved Earnings per Share For Year Ended 12/31/20XX 2 3 4 5 6 7 8 Net Income Less: Preferred Dividends Earnings Available to Common Shareholders Common Shares Outstanding Basic EPS $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statement for 20 $ (50,000.00) $50,000 is from ending balance of Cash dividends of Preferred stock on Trial Balance Sheet for 201 $ 12,378,719.26 Net income ($12,428,719.26) - Preferred dividends ($50,000) $12,378,719.26 $ 1,750,000.00 $1,750,000.00 is from Revised Balance Sheet for 2017 $ 7.07 Earnings Available to Common Shareholders ($12,378,719.26)/Common Shares Outstanding after 9 10 11 12 If all preferred shares are converted: 13 14 15 Net Income Additional Common Shares Common Shares Outstanding after conversion EPS if preferred shares converted Preferred shares are antidilutive $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statement for 20 $ 5,000.00 5,000 is issued shares of Preferred stock from Revised Balance Sheet for 2017 $ 1,755,000.00 Common Shares Outstanding ($1,750,000) + Additional Common Shares ($5,000) $ 7.08 Net income after income taxes ($12,428,719.26)/Common Shares Outstanding after conversion ($1, $ 16 17 18 19 20 21 22 23 24 If all bonds are converted: Net Income Less: Preferred Dividends Add back interest on bonds, net of income tax Earnings Available to Common Shareholders Additional Common Shares Common Shares Outstanding after conversion Fully diluted EPS $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statement for 20 $ (50,000,00) $50,000 is from ending balance of Cash dividends of Preferred stock on Trial Balance Sheet for 201 $ 300,000.00 $4,000,000*0.01*(1-0.25) $400,000*0.75 $ 300,000.00 $ 12,678,719.26 $12,428,719.26 - $50,000 + $300,000 $12,678,719.26 $ 4,000,000.00 $4,000,000 is dollar amount of Bonds Payable on Revised Balance Sheet for 2017 $ 5,750,000.00 Common Shares Outstanding ($1,750,000) + Additional Common Shares ($4,000,000) $ 2.20 Earnings Available to Common Shareholders ($12,678,719.26)/Common Shares Outstanding after 25 26 27 28 37 34 Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate 35 that it will enable them to earn an additional $600,000 after tax. What would be the impact on 36 earnings per share if they raise the $1,000,000 by: a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be converted into 10 shares of Peyton common stock? b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into? 5 shares of Peyton common stock? c) $500,000 of each of the above? 38 39 40 41 42 43 44 45 46 Net Income Less: Preferred Dividends Earnings Available to Common Shareholders Common Shares Outstanding Basic EPS $ $ $ $ $ 600,000.00 100,000.00 $1000,000 x 0.10 500,000.00 100,000.00 5.00 47 48 49 If all preferred shares are converted: 52 $ 600,000.00 53 Net Income Additional Common Shares Common Shares Outstanding after conversion EPS if preferred shares converted Preferred shares are antidilutive 8 8 8 9 8 8 8 X 48 57 58 b If all bonds are converted: Net Income Less: Preferred Dividends Add back interest on bonds, net of income tax 'Earnings Available to Common Shareholders Additional Common Shares Common Shares Outstanding after conversion Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate that it will enable them to earn an additional $600,000 after tax. What would be the impact on earnings per share if they raise the $1,000,000 by: a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be coverted into 10 shares of Peyton common stock? b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into? 5 shares of Peyton common stock? C) $500,000 of each of the above? a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be coverted into 10 shares of Peyton common stock? (a).-If10,000.-10%, $100 par value-convertible preferred-stock was issued by Peyton Approved, Preferred-stock Option: 1 *$600,000 is net-income (profit) after paying taxes (e.g., state and federal-income taxes) - From the above word problem in sentence three. I 1 = 10,000 outstanding shares of preferred-stock-x-$100 par value = $1,000,0009 1 *$1,000,000 -is the total market value, also called total portfolio value of an investor's portfolio containing 10,000 outstanding shares of a preferred-stock. 10%-is the dividend rate, contract dividend rate, stated dividend rate, and-annual-coupon dividend rate. I 10 100 =-0.101 = $1,000,000-~-0.101 = $100,0001 *$100,000 original, outstanding shares of convertible preferred-stock Let the original outstanding shares-of-Peyton-Approved's be 100.0009 $600,000 100,000 original outstanding shares of convertible preferred stock = $6.000 Original earnings per share is $6.00.1 10%-is the dividend rate, contract dividend rate, stated dividend rate, and-annual-coupon dividend rate. I 10 100 =-0.101 = $1,000,000-~-0.101 = $100,0001 *$100,000 original, outstanding shares of convertible preferred-stock Let the original outstanding shares-of-Peyton-Approved's be 100.0009 $600,000 100,000 original outstanding shares of convertible preferred stock = $6.000 Original earnings per share is $6.00.1 b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into? 5 shares of Peyton common stock? (b). --If-$100,000, of 8% convertible bonds was issued by Peyton-Approved. I 8% 8 100 1 =-0.089 $600,000 - $1000,000 x 0.08 100,000 original outstanding shares of convertible preferred stock $600,000 - $80,000 100,000 original outstanding shares of convertible preferred stock $520,000 100,000 original outstanding shares of convertible preferred stock = $5.21 Earnings per share is $5.20.5 C) $500,000 of each of the above? (c).-If-$500,000 preferred-stock-and-$500.000 bonds issued-by-Peyton-Approved. $600,000 - $500.000 x 0.10 - $500,000 x 0.08 100,000 original outstanding shares of convertible preferred stock $600,000 - $50,000 - $40,000 100,000 original outstanding shares of convertible preferred stock $510,000 100,000 original outstanding shares of convertible preferred stock = $5.11 Earnings per share is $5.10.1 Earnings per share would decrease