A public company has asked for your help. They are having a hard time dealing with earnings per share and would like your consultation. They are planning on issuing a few securities in the coming year and would like your help. Please discuss how these two issues will impact the diluted earnings per share calculation. 1) Convertible debt where a required conversion will take place ten years after the issue date 2) Debt with detachable warrants. The warrants may be exercised if profits exceed a certain threshold in the next five years ($1,000,000 is the threshold).
A public company has asked for your help. They are having a hard time dealing with earnings per share and would like your consultation. They are planning on issuing a few securities in the coming year and would like your help. Please discuss how these two issues will impact the diluted earnings per share calculation. 1) Convertible debt where a required conversion will take place ten years after the issue date 2) Debt with detachable warrants. The warrants may be exercised if profits exceed a certain threshold in the next five years ($1,000,000 is the threshold).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A public company has asked for your help. They are having a hard time dealing with earnings
per share and would like your consultation. They are planning on issuing a few securities in the
coming year and would like your help. Please discuss how these two issues will impact the
diluted earnings per share calculation.
1) Convertible debt where a required conversion will take place ten years after the issue
date
2) Debt with detachable warrants. The warrants may be exercised if profits exceed a
certain threshold in the next five years ($1,000,000 is the threshold).
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