Question 8 Pinder Co. currently has 100 million shares outstanding, which are trading at $12 per share. Additionally, it has issued three tranches of stock options to its management to enhance managerial incentives and reduce agency costs. The first tranche consists of 1.25 million (call) options with an exercise price of $9. The second tranche consists of 1 million options with an exercise price of $10. The third tranche consists of 2.25 million options with an exercise price of $15. Pinder Co accounts for these stock options using the treasury stock method. Pinder Co has also issued $100 million in convertible bonds with a conversion price of $20. Pinder Co accounts for this convertible bond using the if-oconverted method. What is the fully diluted number of shares outstanding for Pinder Co? Show all your work.
Question 8 Pinder Co. currently has 100 million shares outstanding, which are trading at $12 per share. Additionally, it has issued three tranches of stock options to its management to enhance managerial incentives and reduce agency costs. The first tranche consists of 1.25 million (call) options with an exercise price of $9. The second tranche consists of 1 million options with an exercise price of $10. The third tranche consists of 2.25 million options with an exercise price of $15. Pinder Co accounts for these stock options using the treasury stock method. Pinder Co has also issued $100 million in convertible bonds with a conversion price of $20. Pinder Co accounts for this convertible bond using the if-oconverted method. What is the fully diluted number of shares outstanding for Pinder Co? Show all your work.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Question 8
Pinder Co. currently has 100 million shares outstanding, which are trading at $12 per share. Additionally,
it has issued three tranches of stock options to its management to enhance managerial incentives and
reduce agency costs. The first tranche consists of 1.25 million (call) options with an exercise price of $9.
The second tranche consists of 1 million options with an exercise price of $10. The third tranche consists
of 2.25 million options with an exercise price of $15. Pinder Co accounts for these stock options using the
treasury stock method. Pinder Co has also issued $100 million in convertible bonds with a conversion
price of $20. Pinder Co accounts for this convertible bond using the if-oconverted method. What is the
fully diluted number of shares outstanding for Pinder Co? Show all your work.
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