On December 31, 2023, Bae Company had outstanding 500,000 shares of common stock and 50,000 shares of 8% cumulative preferred stock (par $10). The preferred stock was convertible into 40,000 shares of common stock. On February 28, 2024, Bae issued an additional 46,000 shares of common stock. A 12% stock dividend was declared and distributed on July 1, 2024. On September 1, 2024, 10,000 shares were retired. At year-end, there were fully vested incentive stock options outstanding for 40,000 shares of common stock (adjusted for the stock dividend). The exercise price was $18. The market price of the common stock averaged $20 during the year. Also outstanding were $1,000,000 face amount of 10% convertible bonds issued in 2021 and convertible into 60,000 common shares (adjusted for the stock dividend). Net income was $1,000,000. The tax rate for the year was 25%. Required: Compute basic and diluted EPS for the year ended December 31, 2024. Note: Round your answers to 2 decimal places. Basic Diluted Earnings per share
On December 31, 2023, Bae Company had outstanding 500,000 shares of common stock and 50,000 shares of 8% cumulative preferred stock (par $10). The preferred stock was convertible into 40,000 shares of common stock. On February 28, 2024, Bae issued an additional 46,000 shares of common stock. A 12% stock dividend was declared and distributed on July 1, 2024. On September 1, 2024, 10,000 shares were retired. At year-end, there were fully vested incentive stock options outstanding for 40,000 shares of common stock (adjusted for the stock dividend). The exercise price was $18. The market price of the common stock averaged $20 during the year. Also outstanding were $1,000,000 face amount of 10% convertible bonds issued in 2021 and convertible into 60,000 common shares (adjusted for the stock dividend). Net income was $1,000,000. The tax rate for the year was 25%. Required: Compute basic and diluted EPS for the year ended December 31, 2024. Note: Round your answers to 2 decimal places. Basic Diluted Earnings per share
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On December 31, 2023, Bae Company had outstanding 500,000 shares of common stock and 50,000 shares of 8%
cumulative preferred stock (par $10). The preferred stock was convertible into 40,000 shares of common stock. On
February 28, 2024, Bae issued an additional 46,000 shares of common stock. A 12% stock dividend was declared and
distributed on July 1, 2024. On September 1, 2024, 10,000 shares were retired. At year-end, there were fully vested
incentive stock options outstanding for 40,000 shares of common stock (adjusted for the stock dividend). The exercise
price was $18. The market price of the common stock averaged $20 during the year. Also outstanding were $1,000,000
face amount of 10% convertible bonds issued in 2021 and convertible into 60,000 common shares (adjusted for the stock
dividend). Net income was $1,000,000. The tax rate for the year was 25%.
Required:
Compute basic and diluted EPS for the year ended December 31, 2024.
Note: Round your answers to 2 decimal places.
Basic
Diluted
Earnings per
share
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