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monitta
3 years ago
7

The information below pertains to Barkley Company for 2015.

Business
1 answer:
Nataliya [291]3 years ago
6 0

Answer:

<u><em>EPS:</em></u> 3.04

<u><em>Diluted EPS: </em></u>  2.50

Explanation:

<em><u>Earnings per share:</u></em>

<em><u /></em>EPS = \frac{income - preferred \: dividends}{common \: stock}<em><u /></em>

preferred dividends: 2,112,000 x 6% = 126,720

2,240,000 income - 126,720 = 2,113,280‬

outstanding shares:

$6,959,000 / 10 each = 695,900

EPS 2,113,280 / 695,900 = 3,03675

<u><em>Diluted EPS:</em></u>

we will calculate as if all possible new share option are exercised.

convertible bonds

2,240,000 / 1,000 = 2,240 bonds

2,240 bonds x 30 possible new shares = 67,200

convertible preferred stock

2,112,000 / 100 = 2,112 preferred stock

2.112 x 3 possible new shares = 6,336‬

stock option: 75,800

Total shares: 695,900 + 67,200 + 6,336 + 75,800 = 845,236

2,113,280‬ / 845,236 = 2,50022 = 2.50

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