pvn.3 Keyser Stamping began the current year with 490,000 commonshares outstanding and issued an additional 210,000 shares onSeptember 1. The firm has $11,800,000, 1.5% convertible bondsoutstanding for a full year (i.e., $177,000 coupon interestper year), which are convertible into 334,000 shares of commonstock. The firm issued the bonds at par and did not convert anyduring the current year. It also had $1,180,000 par value, 5%nonconvertible, noncumulative preferred stock outstanding for thefull year and declared dividends for the current year. The companyis subject to a 30% tax rate and net income is $3,600,000.RequirementBased on this information, compute basic and diluted earnings pershare for the current year.Compute the basic earnings per share for the current year. (Roundthe earnings per share (EPS) to the nearest cent, X.XX.)Basic EPS =

detailed calculation: Net Income available to common shareholders:Net Income: $3,600,000Preferred…

Answered: Keyser Stamping began the current year…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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JackieStamping began the current year with 470,000common shares outstanding and issued an additional 120,000shares on September1. The firm has $11,300,000, 1.5% convertible bonds on June 30 (i.e., $169,500coupon interest annually), which are convertible into 331,000 shares of common stock. The firm issued the bonds at par and did not convert any during the current year. It also had $1,170,000 par value, 4%nonconvertible, noncumulative preferred stock outstanding for the full year and declared dividends for the current year. The company is subject to a 40%effective tax rate and net income is $4,100,000. RequirementBased on this information, compute basic and diluted earnings per share for the current year.
Hihotech Company reported net income of 2.3 million for the year ended 20XX and had a weighted average of 800,000 common shares outstanding. At the beginning of the fiscal year, the company has option of 30,000 with an average exercise price 35. No potentially dilutive securities are outstanding. Over the fiscal year, the company’s market price averaged 55 per share. Required: Calculate company’s basic and diluted EPS under IFRS and US GAAP It has been argued that both methods will yield the same results but the underlying justification employed by both methods is different. Explain these justifications.
Nevada Mining Co. has only long term debt of $600. This debt consist of long term bond which has following features: face value is $1000, time to maturity is 40 years, and annual coupon rate is 0.13. These bond is currently traded in the market at a price of $1,505. Regarding the equity, the current stock price of the shares are $59 and the firms has 13 shares outstanding. Nevada Mining Co. is planning to distribute $11 dividend per share and these dividends are expected to grow 0.06 each year. If the tax rate of Nevada Mining Co. is 0.40, calculate the WACC. Show your steps in your calculations. Please answer in detail use formulae step by step answer
c. A company has $20,912,543 of net income during the year and 934,887 common shares outstanding, 96,508 of which are treasury shares, and 2,000,000 authorized shares. Assume the company has 1,000 convertible bonds with a total face value of $1,000,000 since the beginning of the year. The bonds were issued at par with a 5% coupon rate and each bond converts to 2 shares of stock. The company has an effective tax rate of 21%. Compute diluted EPS. Enter your answer in dollars rounded to 2 decimal places with no $ or commas
Nacho Libre S.A. has 3,000,000 common shares outstanding that trade for $20.00 per share. The company has also issued one bond with a par value of $60,000,000 that currently trades at 110 percent of par. You observe that the company's required return on stock is 10.00 percent and the (after-tax) yield to maturity on its debt is 2.00 percent. What is the weighted average cost of capital? Write your answer as a percent rounded to two decimals, but don't include % sign. Numeric Response
During the current year, North Corporation had 2 million shares of common stock outstanding. Two thousand 10% convertible bonds, each with $1,000 face value, were issued at face amount at the beginning of the year. East reported net income of $2 million for the year. Each bond is convertible into 10 shares of common stock. The tax rate is 25%. What is diluted EPS (rounded)? A. $1.00. B. $0.90. C. $0.95. D. $1.10. -3-
CH Holdings Inc has net earnings of $5,456,000 for the year ended 31 December 20X5. It has convertible bonds currently outstanding with a face value of $8,500,000 and a book value of $7,871,852 at 1 January, 20X5. The bonds have a coupon interest of 2.5% payable semi-annually on 30 June and 31 December. The effective interest rate on similar bonds with no conversion option at the time of issue was 6.5%. The bonds have a conversion price of $40 per share. The weighted average number of shares outstanding for the year was 1,500,000, CH's income tax rate is 28%. Required: Compute the basic and diluted EPS for CH Holdings Inc. (Do not round intermediate calculations and round your answer to 2 decimal places.) Basic EPS Diuted EPS
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 bonds with an effective conversion price of $4.00. The average market share price for the reporting period is $7.50. What is the diluted shares outstanding using the treasury stock method & if-converted methods
CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 5.5% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Select the correct answer. a. $6,272,875 b. $6,271,677 c. $6,273,474 d. $6,272,276 e. $6,271,077
CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 1,700,000 Common stock ($10 par) 10,000,000 Retained earnings 4,600,000 Total debt and equity $26,300,000 The bonds have a 3.8% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 11.1%, so the bonds now sell below par. What is the current market value of the firm's debt? Group of answer choices $5,429,902 $5,656,148 $5,260,218 $6,165,201 $5,938,955
Filer Manufacturing has 9,908,628 shares of common stock outstanding. The current share price is $62.35, and the book value per share is $4.17. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $69,297,716, has a 0.07 coupon, matures in 16 years and sells for 94 percent of par. The second issue has a face value of $43,022,656, has a 0.07 coupon, matures in 15 years, and sells for 93 percent of par. What is Filer's weight of equity on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)
CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 5.5% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?

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