Net income is 1098529. Compute basic and diluted EPS. WHL average stock price during the year was $24 per share. The computation of diluted EPS when we have actual stock-based compensation forfeitures is quite complex. For the sake of simplicity, just assume there were no forfeitures when you are computing diluted EPS. On January 1 of the current year, WHL had 441,100 shares of $1 par value common stock issued (i.e., the shares had been issued prior to the current year). They have 1,245,000 shares authorized and 400,200 shares outstanding. WHL has had only one stock repurchase transaction in its history. On August 1 of the current year, WHL reissued 6,650 shares for$24 per share. On December 1 of the current year, WHL reissued 11,700 shares at $12 per share. WHL declared dividends of 18 cents per share on the last day of each calendar quarter and paid them on the 5th day of the 1st month of each calendar quarter. For the sake of simplicity, assume the date of record is also the last day of each calendar quarter. WHL did not declare any dividends in the prior year. WHL granted 67,200 employee stock options on January 1, 2021. The options give the employees the right to acquire 67,200 shares of WHL common stock for an exercise price of $21.65 per share. The market price on the date of grant was $21.65. The required vesting period is 2 years, so the options vest on December 31 of the current year. The options have a 7 year expiration period. On March 1 of the current year, WHL issued 725, 7.9% bonds with a face value of $1,000 each. The bonds are 10 year bonds and pay interest on August 31 and February 28th of each year. Each bond is convertible into 5 shares of common stock. The bonds sold for a total of $758,200. In addition, WHL incurred $21,933 of bond issue costs. There is not a beneficial conversion option with these bonds.
Net income is 1098529.
Compute basic and diluted EPS. WHL average stock price during the year was $24 per share. The computation of diluted EPS when we have actual stock-based compensation forfeitures is quite complex. For the sake of simplicity, just assume there were no forfeitures when you are computing diluted EPS.
On January 1 of the current year, WHL had 441,100 shares of $1 par value common stock issued (i.e., the shares had been issued prior to the current year). They have 1,245,000 shares authorized and 400,200 shares outstanding. WHL has had only one stock repurchase transaction in its history. On August 1 of the current year, WHL reissued 6,650 shares for$24 per share. On December 1 of the current year, WHL reissued 11,700 shares at $12 per share. WHL declared dividends of 18 cents per share on the last day of each calendar quarter and paid them on the 5th day of the 1st month of each calendar quarter. For the sake of simplicity, assume the date of record is also the last day of each calendar quarter. WHL did not declare any dividends in the prior year. WHL granted 67,200 employee stock options on January 1, 2021. The options give the employees the right to acquire 67,200 shares of WHL common stock for an exercise price of $21.65 per share. The market price on the date of grant was $21.65. The required vesting period is 2 years, so the options vest on December 31 of the current year. The options have a 7 year expiration period.
On March 1 of the current year, WHL issued 725, 7.9% bonds with a face value of $1,000 each. The bonds are 10 year bonds and pay interest on August 31 and February 28th of each year. Each bond is convertible into 5 shares of common stock. The bonds sold for a total of $758,200. In addition, WHL incurred $21,933 of bond issue costs. There is not a beneficial conversion option with these bonds.
Trending now
This is a popular solution!
Step by step
Solved in 1 steps
