Determine the efficient market being discussed in each of the following situations.

Given the following financial structure for Company S for all of 2016:

Mila [183]

Answer:

Explanation:

A.)

The Basic EPS can be determined by using the formula:

$\mathtt{Basic \ EPS = \dfrac{Net \ income \ attributabe \ to\ common \ stock \ holders }{\text{common stock outstanding throughout the year}} }$

$\text{Given Net income = \$2,600,000}$

$\text{Net income available for common stock holders = }$ $\text{ Net income given less dividend}$

$\text{ to preferred holders of stock}$

$\mathtt{=$2,600,000 - $100 \times 50000\times 6\%}$

$=\$2,300,000$

$\text{Common stock} = $800,000$

∴

$\mathbf{Basic \ EPS = \dfrac{\$2,300,000}{800,000} }$

$\mathbf{Basic \ EPS = \$2.88 \ per \ common \ stock}$

B.)

The calculations for the numerator and denominator effect are:

$\text{Calculation of the effect on incremental EPS}$

Convertible on preferred stock $\mathtt{=\dfrac{500,000 \times 100 \times 6\%}{50000\times 5}}$

$=1.20$

Convertible Bond $=\dfrac{500,000 \times 8\%\times 70\%}{\dfrac{500,000}{1000\times 20}}$

= 2.80

Stock options $= \dfrac{0}{100,000- (100,000\times \dfrac{60}{80})}$

= 0

Determination of the numerator & denominator effect for each convertible securities shown above are:

Numerator (N) Denominator (D) Dilution index = N/D

Net income $2,600,000

Less: Preferred $300000

Dividend

Common stock A

Net income $2,300,000 800,000 2.875

Add: Stock

Options (B) 0 25000

Total (C) = (A + B) $2300000 825000 2.788

Add: Convertible

Bonds (D) 428000 10000

Total (E) = (C+D) $2328000 835000 2.787

Add: Convertible

Preferred Stock (F) $300000 250000

Total (E) + (F) $2628000 1085000 2.422

C.)

Particulars Dilutive Index Rank (most dilutive is 1.)

Stock Option 2.788 1

Convertible Bonds 2.787 3

Preferred Stock 2.422 2

D.)

From above, the convertibles are diluted EPS (DEPS)

$\text{ DEPS =Net income available common stockholders + net tax dividend on convertible securities}$ ÷ $\text{weighted average no. of common shares + effect of convertible stock + convertible stock options}$

$\text{DEPS (1{st} stage) for only common stock}= \dfrac{2300000}{800000} = \$2.88}$

$\text{DEPS (2{st} stage)with \ stock \ options}= \dfrac{2300000+0}{800000+25000} = \$2.788}$

$\text{DEPS (3{st} stage)with \ stock \ options \& preferred \ stock }= \dfrac{2300000+300000+0}{800000+250000+25000} = \$2.42}$

3 0

3 years ago

Some of the characteristics of the new breed of global leaders include Question 8 options: a) The skills and abilities to intera

skelet666 [1.2K]

Answer:

d) All of the above

Explanation:

Leadership can be defined as a process which typically involves motivating, encouraging and inspiring employees working under an individual to be innovative and create positive changes that will foster growth and enhance the success of a group, business firm, state, or country in the future.

A leader can be defined as an individual who is saddled with the responsibility of controlling, managing and maintaining a group of people under him or her. Some types of power expressed by leaders are referent power, legitimate power, coercive power, etc.

Generally, leaders use their powers to get other people to follow them.

In conclusion, all of the aforementioned characteristics are possessed by the new breed of global leaders across the world.

8 0

3 years ago

You have just made your first $4,500 contribution to your individual retirement account. Assume you earn an annual return of 11.

shusha [124]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Investment= $4,500

Interest rate= 11.45%

For both options, we will use the following formula:

FV= PV*(1+i)^n

a. Number of years= 43

FV= 4,500*(1.1145^43)

FV= $476,053.37

b. Number of years= 33

FV= 4,500*(1.1145^33)

FV= $161,010.77

5 0

4 years ago

The entry to accrue a contingent liability reduces equity but not income. is made if it is more likely than not that the liabili

Lorico [155]

Answer:

is made if it is more likely than not that the liability has been incurred.

Explanation:

When contingent liability is recorded it is recorded by debiting income statement and creating a liability in balance sheet, also it is not accounted for until the amount of liability is pretty certain as without being clear about its occurrence and the amount involved the liability cannot be recorded.

There is no such loss account, there exists only income statement.

Therefore, with the above we can conclude that contingent liability is recorded only if:

is made if it is more likely than not that the liability has been incurred.

3 0

4 years ago

Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period. Units U

HACTEHA [7]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period.

Units= 100

Unitary Cost Beginning Inventory $ 46

Purchases:

#1= 650units at $42

#2= 550units at $38

#3= 200units at $36

The ending inventory is 350 units.

A) First in, first out

First, we need to calculate the number of units sold:

Units sold= beginning inventory + purchases - ending inventory

Units sold= 100 + 1400 - 350= 1150

Ending inventory= 200 units at 36 + 150 at 38= 200*36+150*38=$12900

Cost of goods sold= 100*46 + 650* 42 + 400* 38=$47100

B) Average cost= total cost of units available for sale/ number of unit

Average cost= (100*46+650*42+550*38+200*36)/1500

Average cost= $40 unit

Ending inventory= 350*40= $14,000

COGS= 1150*40= $46,000

C) Last in, first out

Ending inventory= 100 units* 46 + 250 units*42= $15,100

COGS= 200* 36 + 550*38+ 400*42= $44,900

8 0

3 years ago