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Semmy [17]
3 years ago
10

Nosloc Corp. had $800,000 net income in 2019. On January 1, 2019 there were 200,000 shares of common stock outstanding. On April

1, 20,000 shares were issued and on September 1, Nosloc bought 30,000 shares of treasury stock. There are 30,000 options to buy common stock at $40 a share outstanding. The market price of the common stock averaged $50 during 2019. The tax rate is 40%. During 2019, there were 40,000 shares of convertible preferred stock outstanding. The preferred is $100 par, pays $3.50 a year dividend, and is convertible into three shares of common stock. Nosloc issued $2,000,000 of 8% convertible bonds at face value during 2018. Each $1,000 bond is convertible into 30 shares of common stock. Instructions Compute diluted earnings per share for 2019. Show all computations.
Business
1 answer:
tresset_1 [31]3 years ago
5 0

Answer:

diluted EPS = $2.05

Explanation:

diluted earnings per share = net income / (weighted common stocks outstanding + diluted shares).

net income = $800,000

weighted common stocks outstanding:

January 1, 200,000 common stocks

April 1, 20,000 stocks issued = 20,000 x 9/12 = 15,000 common stocks

September 1, 30,000 treasury stocks purchased = -30,000 x 4/12 = -10,000

total weighted stocks outstanding = 205,000

diluted shares:

30,000 options at $40 per stock = [($50 - $40) / $50] x 30,000 = 6,000

2,000 bonds x 30 stocks = 60,000

preferred stock = 40,000 x 3 = 120,000

total diluted shares = 186,000

diluted EPS = $800,000 / (205,000 + 186,000) = $2.05

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Which one of the following is NOT a real option? The option to buy shares of stock if its price is expected to increase. The opt
puteri [66]

Answer:

The answer is: The option to buy shares of stock if its price is expected to increase.

Explanation:

A <em>"real option"</em> in management is: a choice managers can take concerning business investment opportunities. <em>Real options</em> usually involve tangible assets (machinery, buildings, inventory, land, etc.) but not financial instruments or stocks.

So the buying or selling of stocks aren´t considered <em>real options</em> in business management.

4 0
3 years ago
Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 20
Evgesh-ka [11]

Answer: 2016 CPI is 110

Explanation:

Given the following :

Base year = 2012

Cost of basket in 2012 = $50

Cost of basket in 2014 = $52

Coat of basket in 2016 = $55

The Consumer Price Index (CPI) is calculated using the formula :

CPI = (weighted cost item in current period / weighted cost of item in base period) × 100

Base period / year = 2012

Current period = 2016

Therefore, 2016 CPI equals;

($55 / $50) × 100

= 110

8 0
3 years ago
What's the difference between everyday activities and projects
Wittaler [7]
Projects are a frequent part of business. They differ from routine activities in that they usually have a narrow focus, specific deadline and may occur only once or infrequently. Some project types recur but differ in their goals. I hope it helps !
4 0
3 years ago
Katie’s Cleaning Service has cleaning contracts for 15 apartments, 45 family homes, and 25 office buildings. She estimates that
Tomtit [17]

Answer:

correct option is B: $29,000

Explanation:

given data

apartments = 15

family homes = 45

office buildings = 25

pay for cleaning staff =  $12.50/hour

solution

we get here Total Budgeted hours that is

type                      Number     Hrs/Clean      No of Cleans    Total Hours

Apartments           15                  4                    4                      240

Homes                   45                 6                    4                      1080

Office                     25                10                    4                     1000

Total Budgeted hours need per month                                2320

Budgeted cost per month that is 12.50/hrs so it will           29000

so correct option is B: $29,000

3 0
3 years ago
On December 31, 2018, Gardner Company holds debt securities classified as HTM with a face amount of $100,000 and a carrying valu
Sunny_sXe [5.5K]

Answer:

$2,850

Explanation:

Given the following :

Face value of security = $100,000

Carrying value = $95,000

Effective interest rate = 6%

Interest paid semianually = $2500

The effective interest revenue recognized for the six months ended December 31, 2018 is:

IF effective interest rate = 6%

Semiannual interest = 6% / 2 = 3%

Therefore effective interest revenue for six months will be the product of the carrying value and the interest rate within the six months period :

3% = 0.03

0.03 * $95,000 = $2,850

3 0
2 years ago
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