A corporation has 12 000 ordinary shares and options to purchase 1 500 ordinary shares at R10 per shareoutstanding the entire year. The average market price for the ordinary shares during the year was R15 pershare. In calculating the diluted earnings per share using the treasury share method, the share optionwouldSelect one:O a. have an antidilutive impact on earnings per share because the assumed shares issued exceeds theassumed shares reacquiredO b. have a dilutive impact on earnings per share because the assumed shares reacquired exceeds theassumed shares issued4O c. have an antidilutive impact on earnings per share because the assumed shares reacquired exceeds theassumed shares issuedO d. have a dilutive impact on earnings per share because the assumed shares issued exceeds the assumedshares reacquiredmnion.retained earnings for all of the following reasons except

Share option gives a right to existing shareholders to purchase more shares of the company at a…

Answered: A corporation has 12 000 ordinary…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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S American Health Systems currently has 7,200,000 shares of stock outstanding and will report earnings of $12 million in the current year. The company is considering the issuance of 1,300,000 additional shares that will net $40 per share to the corporation. a. What is the immediate dilution potential for this new stock issue? (Do not round intermediate calculations and round your answer to 2 decimal places.) Dilution b-1. Assume that American Health Systems can earn 15 percent on the proceeds of the stock issue in time to include them in the current year's results. Calculate earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share per share b-2. Should the new issue be undertaken based on earnings per O Yes O No share?
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Vijay
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Hettenhouse Company's perpetual preferred stock sells for $103.00 per share, and it pays a $7.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC? a. 7.28% b. 7.50% c. 7.66% Od. 8.23%

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