Q25. As of the beginning of the year HalfPass Productions, Inc., had the following complex capital structure:

§           3,000,000 common shares outstanding.

§           175,000 options with an exercise price of $22.

§           250,000 warrants with an exercise price of $18.

During the year:

§           On March 1, the company issued 100,000 new shares of common stock.

§           On July 1, the board of directors declared a 15% stock dividend.

§           On September 1, the company repurchased 125,000 shares.

§           Net income (after-tax) for the year was $7,500,000.

§           The company paid common dividends of $2,750,000 and preferred dividends of $1,300,000.

§           The average market price for the common stock was $25 per share.

Assume the fiscal year is January 1 through December 31. At year end, HalfPass’s basic EPS is closest to:

A)   $1.66.

B)   $1.77.

C)   $1.94.

Q26. Washington, Inc.’s stock transactions during the year 2004 were as follows:

January 1           720,000 shares issued and outstanding

May 1         2 for 1 stock split occurred

What was Washington’s weighted average number of shares outstanding during 2004, for earnings per share (EPS) computation purposes?

A)   1,500,000.

B)   1,440,000.

C)   1,666,667.

Q27. A firm has a weighted average number of 20,000 common shares selling at an average of $10 throughout the

     year and 11,000, 10%, $100 par value preferred shares. If the firm earns $210,000 after taxes, what is its Basic

     EPS?

A)   $7.50 / share.

B)   $10.50 / share.

C)   $5.00 / share.

Q28. Zichron, Inc., had the following equity accounts on December 31:

§           Common stock: 20,000 shares.

§           Preferred stock A: 10,000 shares convertible into common on a 2 for 1 basis, dividend of $40,000 was declared during the year.

§           Preferred stock B: 10,000 shares, convertible to common on a 4 for 1 basis, dividend of $5,000 was declared during the year.

§           The company reported net income of $120,000 and paid a $20,000 dividend to its common shareholders.

What are the basic earnings per share reported for the year?

A)   $2.75.

B)   $3.75.

C)   $2.00.

Q29. What are the diluted earnings per share reported for the year?

A)   $1.50.

B)   $3.00.

C)   $1.33.

thx