Information relating to the capital structure of Harry Porter Corporation at December 31, 2010 and 2011, is
Question:
Information relating to the capital structure of Harry Porter Corporation at December 31,
2010 and 2011, is as follows:
Outstanding
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270,000 shares
Convertible preferred stock noncumulative (issued in 2009) . . . . . . . . . . . . . . .. . . 24,000 shares
7.5% convertible bonds (issued in 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $900,000
Stock options to purchase 32,000 shares at $12. Market price of
Harry Porter stock was $18 at December 31, 2011.
Harry Porter Corporation paid dividends of $4 per share on its preferred stock.
The preferred stock is convertible into 48,000 shares of common stock. The 7.5% convertible bonds are convertible into a total of 26,000 shares of common stock. The net income for the year ended December 31, 2011, is $760,000. Assume that the income tax rate is 30%. Compute basic and diluted EPS for the year ended December 31, 2011.
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen