Notes payable, 10% coupon, $1,000 par value $1,000,000 Common stock, $1 par, 3,000,000 shares authorized, 500,000 shares issued and outstanding $500,000 Capital in excess of par $2,000,000 Retained Earnings $9,000,000.

Use the following information to answer the next five questions. The following information is also provided:

1. The income tax rate is 40%.

2. The common stock was outstanding for all of 2010.

3. Net income was $1,750,000 for 2010.

4. No bonds or preferred stock were converted during 2010.

12. Use initial information provided above and assume the following issue also exists.

Options were granted in July of 2009 to purchase 50,000 shares of common stock at $20 per share. The average market price of Blue Jays common stock during 2010 was $30 per share. All of the options are still outstanding. Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00

13. Use initial information provided and assume the following issue also exists. (For this question, ignore the options mentioned in the previous question.) $2,500,000 in convertible bonds payable exist bearing an 8% coupon and a par value of $1,000 per bond. The convertible bonds were issued at the beginning of 2010 at face value. Each bond has a face value of $1,000 and is convertible into 40 shares of common stock. Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00

14. Use the initial information provided above and assume the following issue also exists. (For this question, ignore the options and convertible bonds mentioned in the previous two questions.) $2,500,000 in convertible, 10% cumulative, $100 par value preferred stock is outstanding. The convertible preferred stock was issued at the end of 2008 at par. Each share of preferred stock is convertible into 4 shares of common stock. Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00

15. Use initial information provided above and assume the following issues also exist. Options were granted in July of 2009 to purchase 50,000 shares of common stock at $20 per share. The average market price of Blue Jays common stock during 2010 was $30 per share. All of the options are still outstanding. $2,500,000 in convertible bonds payable exist bearing an 8% coupon and a par value of $1,000 per bond. The convertible bonds were issued at the beginning of 2010 at face value. Each bond has a face value of $1,000 and is convertible into 40 shares of common stock. $2,500,000 in convertible, 10% cumulative, $100 par value preferred stock is outstanding. The convertible preferred stock was issued at the end of 2008 at par. Each share of preferred stock is convertible into 4 shares of common stock. Based on this dilutive EPS is closest to

$2.50

$3.00

$3.50

$4.00