Curse of the bambino Entertainment (CotBE) had the following securities outstanding and other information for 2015:

Preferred Stock

Issue A preferred Stock, cumulative and nonconvertible, 6%, $100 par: $800,000

Dividend payments are in arrears for three (3) years

Issue B preferred Stock, non-cumulative and convertible, 8%, $100 par: $700,000

Conversion rate is 6 common shares for every preferred share.

Common stock:

Class A common stock, $1 par, 5,000,000 shares authorized, 1,000,000 shares issued and outstanding at January 1, 2015: $1,000,000

Repurchased 100,000 shares March 1, 2015

Repurchased 80,000 shares July 1, 2015

Sold 120,000 of repurchased (treasury) shares on September 1, 2015

Stock Warrants - warrants that are exchangeable for 80,000 common shares. The warrants were issued on October 1, 2014 and have a $15 exercise price per warrant. The average market price per share during 2013 was $20.

Stock Options- CotBE's issued 100,000 stock options to key executives on January 1, 2015, which vest on December 31, 2017 and have an exercise price of $16 per option

Convertible Bonds-10% Convertible bonds of $4,000,000 were sold at face value on July 1, 2015. Each $1,000 of bond is convertible into 150 shares of common stock.

Other Information:

Net Income for 2015 was $1,600,000

Income tax rate was 40% for 2015

CotBE's Declared and paid cash dividends of $200,000 on common stock during 2015

Required-

Calculate CotBE's Basic and Diluted EPS for the year ended December 31,2015, show all calculations

Answer rating: 100% (QA)

Calculation of Basic EPS Net Income for 2015 A 1600000 Weighted Average Outstanding Sh... View the full answer