Curse of the Bambino Entertainment (CotBE) had the following securities outstanding and other information for 2017: Preferred Stock : Issue A Preferred Stock, cumulative and
Curse of the Bambino Entertainment (CotBE) had the following securities outstanding and other information for 2017:
Preferred Stock :
Issue A Preferred Stock, cumulative and nonconvertible, 5%, $100 par: $1,000,000
Dividend payments are in arrears for three (3) years.
Issue B Preferred Stock, non-cumulative and convertible, 6%, $100 par: $4,000,000
Conversion rate is 4 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, 2017 $1,000,000
Repurchased 120,000 shares on March 1, 2017
Repurchased 60,000 shares on July 1, 2017
Sold 100,000 of repurchased (treasury) shares on September 1, 2017
Stock Warrants - warrants are exchangeable for 100,000 common shares. The warrants were issued on October 1, 2016 and have a $15 exercise price per warrant. The average market price per share during 2017 was $20.
Stock Options – CotBE’s issued 100,000 stock options to key executives on January 1, 2017 which vest on December 31, 2019 and have an exercise price of $16 per option.
Convertible Bonds - 8% Convertible Bonds of $5,000,000 were sold at face value on July 1, 2017. Each $1,000 of bond is convertible into 120 shares of common stock.
Other Information:
- Net Income for 2017 was $1,700,000
- Income Tax Rate was 40% for 2017
- CotBE’s declared and paid a cash dividend of $200,000 on common stock during 2017.
REQUIRED -
Calculate CotBE’s Basic and Diluted EPS for the year ended December 31, 2017, show all calculations .
Step by Step Solution
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Net income 1700000 Dividend on Issue A Preferred stock for for 3 years 1000000 x 5 x 3 150000 Divide... View full answer
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Intermediate Accounting Reporting and Analysis
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
2nd edition
9781305727557, 1285453824, 9781337116619, 130572755X, 978-1285453828
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