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DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS.

DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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EPS Calculation: (Part 2 of 3) DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS. For Part 2 of this question, what is the weighted average number of common shares? a) 85,000 b) 925,000 c) 1,146,250 d) 366,250 O e) 1,086,250 EPS Calculation: (Part 3 of 3) DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS. For Part 3 of this question, calculate the basic EPS: a) 0.474 b) 0.554 O c) 0.567 d) 0.796 O e) 0.500
Transcribed Image Text:EPS Calculation: (Part 2 of 3) DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS. For Part 2 of this question, what is the weighted average number of common shares? a) 85,000 b) 925,000 c) 1,146,250 d) 366,250 O e) 1,086,250 EPS Calculation: (Part 3 of 3) DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS. For Part 3 of this question, calculate the basic EPS: a) 0.474 b) 0.554 O c) 0.567 d) 0.796 O e) 0.500
EPS Calculation: (Part 1 of 3) DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS. For Part 1 of this question, define the basic EPS formula: O a) (Net Income - P.S. Dividend)/ Weighted Average Number of Common Shares O b) (Net Income P.S. Dividend)/Number of Common Shares O c) Net Income / Weighted Average Number of Common Shares d) Weighted Average Number of Common Shares/ (Net Income - P.S. Dividend) e) None of the above
Transcribed Image Text:EPS Calculation: (Part 1 of 3) DEF Co. earned income of $750,000 for the fiscal year ended Dec 31. At the beginning of that year DEF Co. had 40,000 $2.50 Preferred Shares (PS) outstanding and DEF started the year with 330,000 Common Shares (CS). During the year it sold an additional 90,000 CS on May 1, declared a 3:1 split on Jul 1, sold 6000 preferred shares on Sep 1, issued an additional 25,000 CS on Oct 1 and repurchased 360,000 shares on Dec 1. Calculate the EPS. For Part 1 of this question, define the basic EPS formula: O a) (Net Income - P.S. Dividend)/ Weighted Average Number of Common Shares O b) (Net Income P.S. Dividend)/Number of Common Shares O c) Net Income / Weighted Average Number of Common Shares d) Weighted Average Number of Common Shares/ (Net Income - P.S. Dividend) e) None of the above
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