Alpha Corporation reported the following financial details for t ncial year 2021. Revenue is $250 million. EBITDA margin is 45% gin is 25%. D&A is $10 million. Interest expense is $5 million. In dend income is $15 million. The firm sold an asset that has a bo 33 million, for $30 million. The tax rate applicable for the firm is ic number of shares were 5 million, and diluted number of share 5 million. how the required workings to determine the basic EPS and dilu

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Q1. Alpha Corporation reported the following financial details for the
financial year 2021. Revenue is $250 million. EBITDA margin is 45%, EBIT
margin is 25%. D&A is $10 million. Interest expense is $5 million. Interest &
dividend income is $15 million. The firm sold an asset that has a book value
of $33 million, for $30 million. The tax rate applicable for the firm is 20%. The
basic number of shares were 5 million, and diluted number of shares were
5.25 million.
a) Show the required workings to determine the basic EPS and diluted EPS
for 2021.
b) The Board of Directors of Alpha Corporation decided to declare 40% of
net income as dividend for the financial year 2021. An investor holds 350
shares of Alpha Corporation. Determine the dividend income received by the
investor. How much funds will be added to the retained earnings account for
2021.
Transcribed Image Text:Q1. Alpha Corporation reported the following financial details for the financial year 2021. Revenue is $250 million. EBITDA margin is 45%, EBIT margin is 25%. D&A is $10 million. Interest expense is $5 million. Interest & dividend income is $15 million. The firm sold an asset that has a book value of $33 million, for $30 million. The tax rate applicable for the firm is 20%. The basic number of shares were 5 million, and diluted number of shares were 5.25 million. a) Show the required workings to determine the basic EPS and diluted EPS for 2021. b) The Board of Directors of Alpha Corporation decided to declare 40% of net income as dividend for the financial year 2021. An investor holds 350 shares of Alpha Corporation. Determine the dividend income received by the investor. How much funds will be added to the retained earnings account for 2021.
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