Answered: Southland Industries has $60,000 of…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 4FPE: The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million...

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EPS calculations

Southland Industries has $60,000 of 6.0% (annual interest) bonds outstanding, 1,500 shares of preferred stock paying an annual dividend of

$5 per share, and 4,000 shares of common stock outstanding. Assuming that the firm has a 40% tax rate, compute earnings per share (EPS) for the following levels of EBIT:

a. $24,600

b. $30,600

c. $35,000

a. Compute earnings per share (EPS) for EBIT of

$24,600.

Calculate the EPS below: (Round to the nearest dollar except for the EPS which should be rounded to three decimal places.)

EBIT	$
Less: Interest
Net profits before taxes	$
Less: Taxes
Net profit after taxes	$
Less: Preferred dividends
Earnings available to common shareholders	$
EPS	$

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