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Ulleksa [173]
3 years ago
11

Terrell Foods reported $ 660,000 in net income​ and its weighted - average shares outstanding for the year is 100,000 shares. In

prior years it sold $ 1,000,000 of​ 8% long - term convertible bonds at par which are still outstanding at the start of the year. The bonds are convertible into 40,000 shares of common stock. The tax rate for all years is​ 40%. Bondholders convert the bonds on July 1 of the current year. If Terrell has no other potentially dilutive securities and no preferred​ stock, what are basic and diluted​ EPS?
Business
1 answer:
Solnce55 [7]3 years ago
3 0

Answer:

Basic EPS = $6.6

Diluted EPS = $5.06

Explanation:

The computation of basic and diluted​ EPS is shown below:-

Basic EPS = Net income ÷ Weighted average shares outstanding

= $660,000 ÷ 100,000

= $6.6

Interest on convertible bonds = 1,000,000 × 8%

= 80,000

Diluted EPS = (Net income + Interest on convertible bonds × (1 - Tax%)) ÷ (Weighted average shares outstanding + Shares from Convertible bonds)

= ($660,000 + 80,000 × 60%) ÷ (100,000 + 40,000)

= ($660,000 + 48,000) ÷ (140,000)

= $708,000 ÷ 140,000

= $5.06

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The next dividend payment by Wyatt, Inc., will be $2.30 per share. The dividends are anticipated to maintain a growth rate of 4.
balandron [24]

Answer:

Required return 10.27%

Dividend yield 5.77%

Expected capital gains yield 4.5%

Explanation:

Calculation for required return using this formula

A. R = (D1 / P0) + g

Let plug in the formula

Required return = ($2.30 / $39.85) + .045

Required return = .1027*100

Required return= 10.27%

Therefore Required return is 10.27%

Calculation for dividend yield using this formula

Dividend yield = D1 / P0

Let plug in the formula

Dividend yield = $2.30 / $39.85

Dividend yield = .0577*100

Dividend yield = 5.77%

Therefore Dividend yield is 5.77%

Calculation for the expected capital gains yield

Using this formula

Expected capital gains yield=Required return-Dividend yield

Let plug in the formula

Expected capital gains yield=10.27%-5.77%

Expected capital gains yield=4.5%

Therefore Expected capital gains yield is 4.5%

7 0
3 years ago
Suppose that the public holds 50% of the money supply in currency and the reserve requirement is 20%. Banks hold no excess reser
Mice21 [21]

Answer:

the required reserves will increase by 1,200 dollars

Explanation:

the required reserve ratio is 20%

for each dollar the bank receive in deposit it can loan up to 80% and must keep 20%

the multiplier will be: 1 / 0.2 = 5

each dollar of deposit will increase the money supply by 5

and each dollar withdraw will decrease money supply by 5

Therefore, for this deposit of 6,000 dollars the bank will kept:

$6,000 x 20% = $1,200

7 0
2 years ago
Which of the following statements is correct?
Kamila [148]

Answer:

The correct answer is d. Different economic models employ different sets of assumptions.

Explanation:

To approach the study of economic reality it is necessary, in some way, to simplify it; keep certain variables under control. Precisely for this, it is that economic models are built.

Economic models are built on principles of departure, called "assumptions." Such assumptions fulfill the same role as the postulates in geometry. That is:

  1. They are not subject to deduction from other more basic principles.
  2. They are "reasonably" true but not necessarily verifiable.
  3. They function as premises in the logical structure to deduce the conclusions and correlations found in the lowest levels of generality.

We can say then, that the theoretical explanations refer to invisible "relationships", whose existence is proposed by the theory, and whose implications are logically deduced, and then corroborated by observations. They consist of:

  1. Assumptions (eg subjects want to maximize their earnings).
  2. Relevant variables (eg price and quantity).
  3. Binding hypothesis (eg quantity demanded based on price).
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5 0
3 years ago
The two types of interaction diagrams are _____ diagrams.
Sedaia [141]

Answer:

B: class and sequence.

please brainlist answer

7 0
2 years ago
In year 1, the Consumer Price Index was 120 and the average nominal income was $30,000. In year 2, the Consumer Price Index was
Cerrena [4.2K]

Answer:

Real income has increased by $720 in terms of dollar and 2% in percentage

Explanation:

<em>The real income is determined by adjusting the nominal income for inflation. The consumer price index (CPI) is used to measure the rate of inflation.</em>

R<em>eal income = Nominal income × CPI Base year/ CPI in current year</em>

Real Income =         32000 × 120/125

                                =$30,720

Change Real income

Change in real income ($) = 30,720 - 30,000

                                        = $ 720  

Change in real income (%)  =  (720/30,000) × 100

                                      = 2%

Real income has increased by $720 in terms of dollar and 2% in percentage

                     

3 0
3 years ago
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