Potentially Dilutive Securities Peyton has the following potential dilutive securities: $4,000,000 in bonds payable 10%, 20 year. Every $1,000 bond can convert to 5 shares of common stock. Preferred Stock. Every share issued can convert to 1 share of common stock. Expansion Plans The company is adding two storefront locations and launching a new marketing campaign, which is estimated to bring in 20,000 new customers over the next six 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 financing options are: 

1) Issuing an additional $1,000,000 of 10%, 100-par convertible preferred stock (same class as is currently outstanding)

 2) Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue) 

3) $500,000 each of preferred stock and bonds

Answer rating: 100% (QA)

1 Issuing an additional 1000000 of 10 100par convertible preferred stock 100000 will be ... View the full answer