Assume company Z issued 1,000 call stock options at the beginning of year 2021; the exercise price is $20. The Basic EPS = $2.5 = 25,000/10,000 (with a net income of $25,000 and WACS of 10,000). Th average share price equals $30 currently. The diluted eps is: O a. 2.419 O b. 2.5 O c. 2.403 O d. 2.7 Oe. None of the above Refer to Q17. In addition to the stock option, the company issued 100 convertible bonds sold at par at the beginning of the year. Each bond is valued at $100 and gives the bondholder the right to convert ear bond to 1 common shares. Coupon rate is 5% and the tax rate 30%. The diluted eps is O a. 2.5 O b. 2.419 O c. 2.403 O d. 2.7 O e. 2.65 Refer to Q17 and Q18. Assume that that the bonds were issued at par on June 30, 2021 with a 1% coupon rate instead of 5%. What would be the diluted EPS for company Z? O a. 2.419 O b. 2.5 O c. 2.403 O d. 1.929 O e. None of the above

Assume company Z issued 1,000 call stock options at the beginning of year 2021; the exercise price is $20. The Basic EPS = $2.5 = 25,000/10,000 (with a net income of $25,000 and WACS of 10,000). Th average share price equals $30 currently. The diluted eps is: O a. 2.419 O b. 2.5 O c. 2.403 O d. 2.7 Oe. None of the above Refer to Q17. In addition to the stock option, the company issued 100 convertible bonds sold at par at the beginning of the year. Each bond is valued at $100 and gives the bondholder the right to convert ear bond to 1 common shares. Coupon rate is 5% and the tax rate 30%. The diluted eps is O a. 2.5 O b. 2.419 O c. 2.403 O d. 2.7 O e. 2.65 Refer to Q17 and Q18. Assume that that the bonds were issued at par on June 30, 2021 with a 1% coupon rate instead of 5%. What would be the diluted EPS for company Z? O a. 2.419 O b. 2.5 O c. 2.403 O d. 1.929 O e. None of the above

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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f2. Subject :- Finance
Please use the Black-Scholes formula
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