Company A has 279,000 basic shares outstanding and 26,000 outstanding options and warrants.The exercise price of these options is $3.75. The company also has $200,000 of convertible bondswith an effective conversion price of $4.00. The average market share price for the reporting periodis $7.50. What is the diluted shares outstanding using the treasury stock method & if-convertedmethods?345,333305,000342,000292,000

Fully diluted shares include covertly preferred stocks, or stocks that can be claimed through…

Answered: Company A has 279,000 basic shares…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Automatic Data Processing recently issued $150 million of 61/2 percent convertible debentures maturing in 2011. The debentures are convertible into common stock at $83.45 a share. The company's common stock was trading at about $67 a share when the convertibles were issued. How many shares of common stock can be obtained by converting one $1,000 par value debenture; that is, what is the conversion ratio?
HaidiKho Allams has 1,750,000 shares of authorized common stock, each having a $1 par value. Over the years, it has issued 1,532,000 share 1.) What would be its common stock after the financing? Format: 1,111,111 2.)What would be its additional paid-in capital accounts after the financing? Format: 11,111,111
Consider the following book value balance sheet of ABC, in which all figures are in million dollars. The preferred stock currently sells for $15 per share and the common stock for $20 per share. There are 1 million common shares outstanding. Assets Liabilities and Net Worth Cash and short-term securities $1 Bonds with coupon rate of 8% paid annualy, maturity of 10 years and the current yield to maturity of 9% $10 Account receivables $3 Preferred stock (par value $10 per share) $2 Inventories $7 Common stock $10 Plant and equipment $21 Retained earnings $10 Total $32 $32 a) What is the capital structure of the firm based on market values? b) The preferred stock pays a dividend of $2 per share, the beta of the common stock is 1.5, the market risk premium is 7%, the risk-free rate is 4%, and the firm’s tax rate is 40%. ABC’s bonds have coupon rate of 6%, and currently are trading at par. What is the firm’s weighted average cost of capital (WACC)?…
Filer Manufacturing has 5,766,872 shares of common stock outstanding. The current share price is $36.05, and the book value per share is $7.08. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $64,298,817, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $48,100,600, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par. The most recent dividend was $2.78 and the dividend growth rate is 0.05. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.35. What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)
McCann Catching, Inc. has 3.00 million shares of stock outstanding. The stock currently sells for $12.79 per share. The firm's debt is publicly traded and was recently quoted at 89.00% of face value. It has a total face value of $19.00 million, and it is currently priced to yield 10.00%. The risk free rate is 3.00% and the market risk premium is 8.00%. You've estimated that the firm has a beta of 1.20. The corporate tax rate is 34.00%. The firm is considering a $45.89 million expansion of their production facility. The project has the same risk as the firm overall and will earn $11.00 million per year for 7.00 years. What is the NPV of the expansion? (answer in terms of millions, so 1,000,000 would be 1.0000)
A company's current stock price is $35. Which of the following securities would cause Diluted EPS to be different than Basic EPS? (check all that apply) Preferred stock that pays $10 dividends per share per year Convertible debt that increases EPS if converted Vested stock options with an exercise price of $40 Convertible debt that reduces EPS if converted Vested stock options with an exercise price of $30
Filer Manufacturing has 5,321,196 shares of common stock outstanding. The current share price is $52.83, and the book value per share is $9.19. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $43,973,360, has a 0.05 coupon, matures in 12 years and sells for 93 percent of par. The second issue has a face value of $50,007,464, has a 0.07 coupon, matures in 20 years, and sells for 89 percent of par. What is Filer's weight of debt on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)
Give typing answer with explanation and conclusion Garfield and Moore has 130,000 shares of common stock outstanding at a price per share of $41.20. There are 12,000 shares of preferred stock outstanding at a price of $58 a share. The firm also has 2,500 bonds outstanding that are currently selling at par. Each bond has a $1,000 face value. What weight should be assigned to the preferred stock when computing this firm's WACC? 0.21 0.08 0.12 0.16
Novak Inc. had net income for the current year ending December 31, 2023 of $953,780. During the entire year, there were 502,000 common shares outstanding. The company had two classes of preferred shares outstanding: the Class A preferred shares were $2.09 cumulative shares of which 12,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 103,000 $6.09 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Novak had outstanding a $1,000,000, 6% bond issued at par in 2012 that was convertible to 21,000 common shares. The company also had outstanding a $1,000,000, 4% bond issued at par in 2013 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Novak's tax rate is 37%. Determine an incremental per share effect for the 2012 bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.) Potentially dilutive security 2012 Bonds Incremental Numerator Effect $ Incremental…
Filer Manufacturing has 4,308,744 shares of common stock outstanding. The current share price is $42.19, and the book value per share is $9.71. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $46,309,431, has a 0.08 coupon, matures in 8 years and sells for 82 percent of par. The second issue has a face value of $41,779,016, has a 0.06 coupon, matures in 20 years, and sells for 80 percent of par. What is Filer's weight of debt on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)
Based on the following information, what is the market weight of common stock/market weight of preferred stock/market weight of bonds (long-term debt) Given: Source of capital Common Stock Preferred stock 155,000 shares Bonds ($1000 par value) 190,000 bonds 31%/5%/64% 60%/9%/31% # shares or bonds outstanding 1.9 million shares 35%/12%/53% 85%/7%/8% Mkt Price $48.00/share $102/share $985 per bond

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