EBK INTERMEDIATE ACCOUNTING
3rd Edition
ISBN: 9780136946465
Author: SANNELLA
Publisher: VST
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Textbook Question
Chapter 20, Problem 20.4E
Computing Basic and Diluted EPS, Convertible Bonds,
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Company A has 279,000 basic shares outstanding and 26,000 outstanding options and warrants. The exercise price of these options is $3.75. The company also has $200,000 of convertible bonds with an effective conversion price of $4.00. The average market share price for the reporting period is $7.50. What is the diluted shares outstanding using the treasury stock method & if-converted methods
ABC, Inc. has the following securities outstanding in the market. Common Stock 10,000,000 shares outstanding at a market price of $150.00. A recent analyst report shows these shares have a beta of 1.2. Preferred Stock 250,000 shares outstanding with a dividend of 5% of par. Market price is $75, a $50 discount to par. AA-Rated Corporate Bonds 750,000 bonds with par value of $1000 each and a semi-annual coupon of 7.5%. The bonds mature in 25 years and are currently selling at a price of 98.75. Today the expected return on the market is 8% and the market risk premium is 4%. The company has a marginal tax rate of 21%.
What is ABC, Inc.'s WACC?
CMS Corporation's balance sheet as of today is as follows:
Long-term debt (bonds, at par)
Preferred stock
Common stock ($10 par)
Retained earnings
Total debt and equity
$10,000,000
2.000.000
10,000,000
4.000.000
$26.000,000
The bonds have a 6.6% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years
from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the
firm's debt?
Select the correct answer.
Oa. $6,900,480
Ob.$6,901,361
Oc$6,899,600
d. $6,903,121
Oe. $6,902,241
Chapter 20 Solutions
EBK INTERMEDIATE ACCOUNTING
Ch. 20 - Prob. 20.1QCh. 20 - Prob. 20.2QCh. 20 - If-Converted Method. Does the if-converted...Ch. 20 - Diluted EPS. If all potentially dilutive...Ch. 20 - Diluted EPS. Can diluted earnings per share on...Ch. 20 - Diluted EPS, Convertible Debt, and Preferred...Ch. 20 - Prob. 20.7QCh. 20 - Prob. 20.8QCh. 20 - Prob. 20.9QCh. 20 - EPS Disclosures. is an entity required to present...
Ch. 20 - Prob. 20.11QCh. 20 - Hutchins Company had 200,000 shares of common...Ch. 20 - Prob. 20.2MCCh. 20 - Prob. 20.3MCCh. 20 - Prob. 20.4MCCh. 20 - Refer to the information about Hutchins Company in...Ch. 20 - Prob. 20.6MCCh. 20 - Prob. 20.1BECh. 20 - Prob. 20.2BECh. 20 - Computing Income for Basic EPS. Russo Watches, Ltd...Ch. 20 - Prob. 20.4BECh. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Prob. 20.7BECh. 20 - Prob. 20.8BECh. 20 - Prob. 20.9BECh. 20 - Prob. 20.10BECh. 20 - Prob. 20.11BECh. 20 - Computing Basic and Diluted EPS, Options. Nicks...Ch. 20 - Computing Diluted EPS, Convertible Debt. Axelon...Ch. 20 - Computing Basic and Diluted EPS, Preferred Stock....Ch. 20 - Computing Weighted-Average Number of Common Shares...Ch. 20 - Prob. 20.3ECh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.5ECh. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Options,...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.12ECh. 20 - Prob. 20.1PCh. 20 - Prob. 20.2PCh. 20 - Computing Basic and Diluted EPS. Convertible...Ch. 20 - Prob. 20.4PCh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.7PCh. 20 - Prob. 20.8PCh. 20 - Prob. 1JCCh. 20 - Prob. 1FSCCh. 20 - Prob. 1SSCCh. 20 - Basis for Conclusions Case 1: Antidilutive...Ch. 20 - Basis for Conclusions Case 2: Treasury Stock...
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- CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 4.3% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Select the correct answer. a. $5,584,881 b. $5,585,681 c. $5,584,080 d. $5,587,282 e. $5,586,482arrow_forwardCMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 1,700,000 Common stock ($10 par) 10,000,000 Retained earnings 4,600,000 Total debt and equity $26,300,000 The bonds have a 3.8% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 11.1%, so the bonds now sell below par. What is the current market value of the firm's debt? Group of answer choices $5,429,902 $5,656,148 $5,260,218 $6,165,201 $5,938,955arrow_forwardAnswer full question please.arrow_forward
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Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License