Peyton Approved prides itself on transparency with shareholders and investors. The company has added two storefront locations
Question:
Peyton Approved prides itself on transparency with shareholders and investors. The company has added two storefront locations and launched a new marketing campaign, which is estimated to bring in 20,000 new customers over the next 6 months. The company expects this expansion will require an additional $1,000,000 of capital and generate an additional $600,000 of after-tax profit.
The options are:
1. Issuing an additional $1,000,000 of 10%,
2. 100-par convertible preferred stock (same class as is currently outstanding)
3. Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue) $500,000 each of preferred stock and bonds
Determine the impact on earnings per share for each option.
Operations management processes and supply chain
ISBN: 978-0136065760
9th edition
Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra