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mezya [45]
3 years ago
10

During 2018, Angel Corporation had 900,000 shares of common stock and 50,000 shares of 6% preferred stock outstanding. The prefe

rred stock does not have cumulative or convertible features. Angel declared and paid cash dividends of $300,000 and $150,000 to common and preferred shareholders, respectively, during 2018. On January 1, 2017, Angel issued $2,000,000 of convertible 5% bonds at face value. Each $1,000 bond is convertible into five common shares. Angel's net income for the year ended December 31, 2018, was $6 million. The income tax rate is 20%. What is Angel's basic earnings per share for 2018, rounded to the nearest cent?
Business
1 answer:
AfilCa [17]3 years ago
4 0

Answer:

$6.5 per share

Explanation:

Given that,

Net income = $6,000,000

Preferred dividend = $150,000

Weighted average number of common shares  = 900,000

Angel's Basic earnings per share:

[Net income - Preferred dividend ] ÷ Weighted average number of common shares

= [$6,000,000 - $150,000] ÷ 900,000

= 5,850,000 ÷ 900,000

= $6.5 per share

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3 years ago
Answer each of the following independent questions.
amid [387]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Alex Meir recently won a lottery and has the option of receiving one of the following three prizes:

(1) $86,000 cash immediately

(2) $32,000 cash immediately and a six-period annuity of $9,200 beginning one year from today

(3) a six-period annuity of $17,400 beginning one year from today.

1)

A) i= 0.06

i) PV= 86,000

ii) First, we need to calculate the final value of the annuity:

FV= {A*[(1+i)^n-1]}/i

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FV= {9,200*[(1.06^6)-1]}/0.06 + [(9,200*1.06^6)-9,200]= 68,023.31

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ii) FV= {17,400*[(1.06^6)-1]}/0.06 + [(17,400*1.06^6)-17,400]= 128,652.77

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B) The option with the higher present value is option 3. Therefore, it is the best option.

2) Weimer will make annual deposits of $170,000 into a special bank account at the end of each of 10 years beginning December 31, 2016.

Assuming that the bank account pays 7% interest compounded annually.

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7 0
3 years ago
Art is in the 24% marginal tax bracket for 2019. He owes a $10,000 bill for business expenses. Because he reports taxable income
faltersainse [42]

Answer:

$740.8

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To answer this question the following steps are undertaken

1) We consider the Marginal tax bracket Art falls within. And it becomes obvious that his bracket in 2020 is higher than that of 2019. The implication of this discovery is that claiming expenses in 2020 will save more taxes for Art than in 2019.

2) What is his tax savings in 2020 = $10,000 x (0.32-0.24) = $800

Finally, since the present value of tax savings is 0.926

Then the tax savings to realize for 2020 is

$800 x 0.926 = $740.8

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