Options Granted(adjusted for the stock dividend)Date GrantedShare PriceDecember 31, 2019December 31, 2020December 31, 202113,0008,00011,500$18$ 27$ 26The stock options issued in 2019 were not exercised in 2020 or 2021.The mar t price of the common stock averaged $26 per share during 2021.On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 commonshares (adjusted for the stock dividend).Required:Compute Dow's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands.Round "Earnings per share" answers to 2 decimal places. Do not round intermediate calculations)DenominatorEarnings per share%3DNumerator%3DDow's basic%3DDow's diluted On February 28, 2021, Dow sold 56,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares wereretired on July 1. Dow's net income for the year ended December 31, 2021, was $2,400,000. The income tax rate is 25%. Also, as a partof a 2020 agreement for the acquisition of Merrill Cable Company, another 29,000 shares (already adjusted for the stock dividend) areto be issued to former Merrill shareholders on December 31, 2022, if Merrill's 2022 net income is at least $560,000. In 2021, Merrill'snet income was $690,000.As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the currentand each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal tomarket value at the date of grant and can be exercised one year from that date. Information concerning the number of options grantedand common share prices follows:Options Granted(adjusted for the stock dividend)13,0008,00011,500Share Price$ 18$ 27$ 26Date GrantedDecember 31, 2019December 31, 2020December 31, 2021The stock options issued in 2019 were not exercised in 2020 or 2021.The market price of the common stock averaged $26 per share during 2021.On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 commonshares (adjusted for the stock dividend).Required:Compute Dow's hasic and diluted earnings ner share for the vear endedl December 31. 2021 (Enter vour answere in thousands

Earning per share is the portion of the total earnings of the company which is to be distributed to…

On February 28, 2021, Dow sold 56,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,400,000. The income tax rate is 25%. Also, as a part of a 2020 agreement for the acquisition of Merrill Cable Company, another 29,000 shares (already adjusted for the stock dividend) are to be issued to former rrill shareholders on December 31, 2022, if Merrill's 2022 net income is at least $560,000. In 2021, Merrill's net income was $690,00. As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows: Options Granted (adjusted for the stock dividend) 13,000 8,000 11,500 Share Price $ 18 $ 27 $ 26 Date Granted December 31, 2019 December 31, 2020 December 31, 2021 The stock options issued in 2019 were not exercised in 2020 or 2021. The market price of the common stock averaged $26 per share during 2021. On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 common shares (adjusted for the stock dividend). Required: Compute Dow's hacir and dilı ted earnings ner share for the vear ended Decemher 31 2021 (Enter vour ansuere in thoICAnde

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q