Answer:
All equity plan:
EPS = $160,000 / 42,000 = $3.81
Plan I:
EPS = [$160,000 - ($108,000 x 7%)] / 39,000 = $152,440 / 39,000 = $3.91
Plan II:
EPS = [$160,000 - ($324,000 x 7%)] / 33,000 = $137,320 / 33,000 = $4.16
Plan II is better since the resulting EPS is higher than the other alternatives.
Answer:
Following are the solution to the given points:
Explanation:
For point 1:
For point 2:
For point 3:
For point 4:
For point 5:
For point 6:
For point 7:
For point 8:
Answer:
The answer is 324,050 shares
Explanation:
Stock dividends adds to the total number of shares outstanding while treasury stock(buy-back) reduces the total number of outstanding shares.
Beta issued a stock dividend of 4percent. Meaning the outstanding shares will increase by 4percent.
1.04 x 320,000 shares
=332,800 shares is the total number of outstanding shares before treasury stock.
Treasury stock issued on September 30, 2018. This means we have 3months(October 1 - December 31st, 2018).
So we have 3/12 x 35,000 shares
= 8,750 shares
Therefore, the appropriate number of shares to be used in the basic earnings per share computation for 2018:
=332,000 shares - 8,750 shares
= 324,050 shares
