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ra1l [238]
2 years ago
7

Sheffield Corp. had 205000 shares of common stock, 20300 shares of convertible preferred stock, and $1580000 of 4% convertible b

onds outstanding during 2021. The preferred stock is convertible into 39800 shares of common stock. During 2021, Sheffield paid dividends of $1.00 per share on the common stock and $4 per share on the preferred stock. Each $1,000 bond is convertible into 30 shares of common stock. The net income for 2021 was $599000 and the income tax rate was 35%.
Diluted earnings per share for 2021 is :__________
Business
1 answer:
Ahat [919]2 years ago
6 0

Answer:

Diluted earnings per share for 2021 is: <u>$2.19 per share</u>.

Explanation:

Amount of increase in net income if bonds are converted = Total value of convertible bonds * Bond rate * (100% - Tax rate) = $1580000 * 4% * (100% - 35%) = $41,080

Total earnings available to Equity Shareholders = Net income + Amount of increase in net income if bonds are converted = $599000 + $41,080 = $640,080

Number of shares of common stock = 205,000

Number of common shares obtainable from preferred stock = 39,800

Number of common shares obtainable from convertible bonds = (Total value of convertible bonds / $1,000) * 30 = ($1580000 / $1,000) * 30 = 47,400

Total number of shares outstanding = Number of shares of common stock + Number of common shares obtainable from preferred stock + Number of common shares obtainable from convertible bonds = 205,000 + 39,800 + 47,400 = 292,200

Diluted earnings per share = Total earnings available to Equity Shareholders / Total number of shares outstanding = $640,080 / 292,200 = $2.19 per share

Therefore, we have:

Diluted earnings per share for 2021 is: <u>$2.19 per share</u>.

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WriteOn Stationery is new in the market. They have hired a specialized agency to promote their products in the market. Which typ
Brrunno [24]

Answer: Marketing service

Explanation: Marketing services can be defined as those services involving activities like advertising and market research etc. The main focus of marketing is not on advertising the products but to make a demand in the market for the product offered.

In the given case writeon is new in the market hence they need promotion and customer base for selling the product. The advertising objectives that writeon needs can be achieved with the help of marketing activities.

8 0
2 years ago
According to the Investment Company Act of 1940, the definition of "investment company" could include which of the following
kicyunya [14]

Answer:

Option (B) is the right answer.

Explanation:

According to the investment company Act of 1940, the investment companies are those companies whose main business is to gathers investment capital to invest them in marketable securities.

Hence According to the scenario, the most appropriate answer is option (B).

While the other option is incorrect because of the following reason:

  • Brokers/dealers can not be considered as an investment company because they are not the company.
  • Pooled investments in metals are not an investment company but considered as the commodity pool.
  • Insurance companies are also not investment companies.

7 0
3 years ago
Reliable Cars has sales of $807,200, total assets of $1,105,100, and a profit margin of 9.68 percent. The firm has a total debt
Andreyy89

Answer:

19.64%

Explanation:

The return on equity shall be determined through following mentioned formula:

Return on equity=Net profit/Equity

In the given question

Net profit=9.68%*$807,200=$78,136.96

Equity=Assets-Total Debt

          =$1,105,100-64%($1,105,100)

          =$397,836

Return on Equity=$78,136.96/$397,836

                           =19.64%

3 0
3 years ago
A manufacturer of DVD players has monthly fixed costs of $9500 and variable costs of $55 per unit for one particular model. The
Alla [95]

Answer:

(a) C(x) = 9500 + 55x

(b) R(x) = 90x

(c) P(x) = 35x - 9500

(d) C(240) = $22,700

All functions are measured in $.

Explanation:

The total revenue of an entity is a function of the number of units sold and the selling price per unit. The total cost is a function of the fixed cost and the variable cost (which is also a function of the units produced/sold). Profit is a function of sales and cost.

Given that monthly;

fixed costs = $9500

variable costs = $55 per unit

Selling price  = $90 per unit

Where x is the number of units

total costs C(x) in $ = 9500 + 55x

total revenue R(x) in $ = 90x

profit P(x) in $ = 90x - (9500 + 55x)

= 35x - 9500

C(240) = 9500 + 55(240)

= $22,700

5 0
3 years ago
Harbour View Company common stock has a $30 par value and is currently selling for $65. Industry analysts are predicting dividen
madam [21]

Answer:

The expected rate of return on this stock is 10.31%

Explanation:

The constangt growth model of the DDM approach is used to calculate the price of a share based on the edxpected future dividends from a stock that are growing at a constant rate. The formula for price using constant growth model is,

P0 = D0 * (1+g) / (r - g)

Plugging in the values,

65 = 1.7 * (1+0.075) / (r - 0.075)

65 * (r - 0.075) = 1.8275

65r - 4.875 = 1.8275

65r = 1.8275 + 4.875

r= 6.7025 / 65

r = 10.31% or 0.1031

4 0
2 years ago
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