Question: I need help with this question. I am stuck on this question. It is urgent. PArt 1) A company provides you with the following information
I need help with this question. I am stuck on this question. It is urgent.
PArt 1)
A company provides you with the following information about its capital structure for the current year. All securities are assumed to be outstanding for the current year. The beginning balance of common shares outstanding is equal to 600,000 shares. An additional 30,000 common shares were issued on April 1st The company repurchased 12,000 shares of common shares to be held in the treasury on May 1st A 3 for 1 stock split was announced and implemented on August 1st An additional 24,000 common shares were issued on November 1st REQUIRED: Compute the weighted average number of common shares outstanding to be used in Basic EPS.
Part II: (Independent of your answer to Part I)
The beginning balance of outstanding common shares is equal to 300,000 shares The company has 20,000 shares of $100 par value 3% noncumulative, convertible preferred shares. Each preferred share converts into 1 share of common stock. The company has $4,000,000, $1,000 par value, 6% convertible bonds outstanding. The bonds were issued at par. Therefore, the effective interest rate is also 6%. Each bond converts into 20 shares of common stock. Other information: Net income after tax is equal to $800,000. The effective tax rate is 30%. No dividends were declared by the Board of Directors.
REQUIRED: Compute Basic and Diluted Earnings per Share. Antidilution sequencing is not required.
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