1. You are provided the data below regarding shares outstanding during the year.

Beginning of year number of outstanding shares 40,000

End of 1^st quarter 20,000 Stock issuance

End of 2nd quarter 30,000 Stock issuance

End of 3rd quarter -12,000 Stock repurchase

What is the weighted average number of shares outstanding to be used for EPS calculation at the end of the year, that is, end of the 4^th quarter?

2. For the accounting period, B1 Inc. has net income of $3m and 2m weighted average number of shares outstanding. It has 50 convertible bonds with a face value of $1000 each and a coupon rate of 15%. Each convertible bond can be converted into 20 common shares. The tax rate is 35%.

a) Calculate the basic earnings per share.

b) Calculate the diluted EPS.

c) Is this convertible debt anti-dilutive?

d) Does B1 Inc. have a complex capital structure?