Southland Industries has $60,000 of 6.0% (annual interest) bonds outstanding, 1,500 shares of preferred stock paying an annual dividend of $5 per share, and 4,000 shares of common stock outstanding. Assuming that the firm has a 40% tax rate, compute earnings per share (EPS) for the following levels of EBIT: a. $24,600 b. $30,600 c. $35,000 a. Compute earnings per share (EPS) for EBIT of $24,600. Calculate the EPS below: (Round to the nearest dollar except for the EPS which should be rounded to three decimal places.) EBIT $ Less: Interest Net profits before taxes $ Less: Taxes Net profit after taxes $ Less: Preferred dividends Earnings available to common shareholders $ EPS $
Southland Industries has $60,000 of 6.0% (annual interest) bonds outstanding, 1,500 shares of preferred stock paying an annual dividend of $5 per share, and 4,000 shares of common stock outstanding. Assuming that the firm has a 40% tax rate, compute earnings per share (EPS) for the following levels of EBIT: a. $24,600 b. $30,600 c. $35,000 a. Compute earnings per share (EPS) for EBIT of $24,600. Calculate the EPS below: (Round to the nearest dollar except for the EPS which should be rounded to three decimal places.) EBIT $ Less: Interest Net profits before taxes $ Less: Taxes Net profit after taxes $ Less: Preferred dividends Earnings available to common shareholders $ EPS $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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EPS calculations
Southland Industries has $60,000 of 6.0% (annual interest) bonds outstanding, 1,500 shares of preferred stock paying an annual dividend of
$5 per share, and 4,000 shares of common stock outstanding. Assuming that the firm has a 40% tax rate, compute earnings per share (EPS) for the following levels of EBIT:
a. $24,600
b. $30,600
c. $35,000
a. Compute earnings per share (EPS) for EBIT of
$24,600.
Calculate the EPS below: (Round to the nearest dollar except for the EPS which should be rounded to three decimal places.)
|
EBIT
|
$
|
|
|
Less: Interest
|
|
|
|
Net profits before taxes
|
$
|
|
|
Less: Taxes
|
|
|
|
Net profit after taxes
|
$
|
|
|
Less: Preferred dividends
|
|
|
|
Earnings available to
common shareholders |
$
|
|
|
EPS
|
$
|
|
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