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schepotkina [342]
3 years ago
12

On January 2, 2009, L Co. issued at par $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock. No bonds

were converted during 2009. Throughout 2009, L had 1,000 shares of common stock outstanding. L's 2009 net income was $2,000. L's income tax rate is 50%.No potential common shares other than the convertible bonds were outstanding during 2009.L's diluted earnings per share for 2009 would be :A. $1.00.B.$1.20.C. $1.40.D. $2.00.
Business
1 answer:
MrRissso [65]3 years ago
4 0

Answer:

The correct answer is $1.2 per share.

Explanation:

According to the scenario, the computation of the given data are as follows:

Interest expense of Bonds = $20,000 × 4% = $800

Now, Interest expense of Bond, After tax = $800 × ( 1 - 50%) = $800 × 0.50

= $400

So, we can calculate the diluted earning by using following formula:

Diluted Earning = (Net income + Interest expense after tax) ÷ Total outstanding shares outstanding

Where, Total outstanding shares = 1,000 shares + 1,000 shares = 2,000 shares

By putting the value, we get

Diluted earning = ($2000 + $400 ) ÷ 2,000

= $1.2 per share

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Consider an investor who, on January 1, 2019, purchases a TIPS bond with an original principal of $116,000, an 10 percent annual
lakkis [162]

Answer:

(a) $5,823.20

(b) $116,464.

(c) $5,881.43.

Explanation:

Given that,

Original principal = $116,000

Interest rate = 0.5% semi-annual

Time period = 10 years

Inflation rate = 0.4% semi-annual

(b) Inflation adjusted premium at the end of 6 months on June 30,2019:

= Original principal × Semi-annual inflation rate

= $116,000 × (1 + 0.004)

= $116,464.

Therefore, the inflation adjust principal at the beginning of six months is $116,464.

(a) First coupon payment paid on June 30,2019:

= inflation adjust principal × Interest rate

= $116,464 × 0.05

= $5,823.20

(c) Inflation adjusted premium at the end of 6 months on December 31,2019:

= Principal in June 30,2019 × Semi-annual inflation rate

= $116,464 × (1 + 0.01)

= $117,628.64.

Coupon payment on December 31,2019:

= Inflation adjusted premium × Interest rate

= $117,628.64 × 0.05

= $5,881.43.

6 0
3 years ago
why do people take surveys and human verification's for?????????????????????????????????????????????????????????????????????????
Trava [24]
To make sure you are not a robot
8 0
3 years ago
In the early days of the game industry, nearly all games were developed by designers, for designers. More specifically, what age
suter [353]

Based on historical perspective, the age range of the early game designers is between <u>40 to 60years old.</u><u> </u>Also, the gender for which the games were being designed is <u>male</u>.

<h3>History of Game Designs.</h3>

The history of game designs can be traced to William Higinbotham, a Physicist who created the first video game in 1958 at the age of 48 years.

William Higinbotham created the first video game during the Brookhaven annual visitors day to lighten the exhibition show.

The video game he created was tennis, known as "Tennis for Two," and the men in attendance played it.

Hence, in this case, it is concluded that the game designers were <u>men</u>, and they are in the age range of <u>40 to 60 years</u>.

Learn more about the video game industry here: brainly.com/question/14468591

6 0
2 years ago
A stock currently sells for $25 per share and pays $0.24 per year in dividends. What is an investor's valuation of this stock if
Kisachek [45]

Answer:

B) $26.30

Explanation:

To determine an investor's valuation of the stock we must calculate the present value of next year's dividend and selling price:

present value = [dividend / (1 + rate)] + [selling price / (1 + rate)]

present value = [$0.24 / (1 + 15%)] + [$30 / (1 + 15%)] = $0.21 + $26.09 = $26.30

4 0
2 years ago
Connor Corp. has large amount of data that they are trying to analyze from the last 15 years. They have an arithmetic sales grow
MrRa [10]

Answer:

11.14%

Explanation:

Blume's formula is used to combine both arithmetic and geometric returns. This is because using arithmetic growth rate exclusively would be overly optimistic for longer time horizons and on the other hand, using geometric growth rates exclusively would be overly pessimistic for short time horizons.

Using the attached formula, plug in the given numbers;

R(T) would be the sale growth rate we need to calculate.

R(T) = \frac{5-1}{15-1} *0.09 + \frac{15-5}{15-1} *0.12

R(T) =0.0257 + 0.0857

R(T) = 0.1114 as a decimal

Therefore, the forecast sales growth would be 11.14%

7 0
2 years ago
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