BWT, Inc. shows the following data in its financial statements at the end of the year.
Assume all securities were outstanding at the beginning of the year:
§ 6.125% convertible bonds, convertible into 33 shares of common stock. Issue price $1,000, 100 bonds outstanding.
§ 6.25% convertible preferred stock, $100 par, 2,315 shares outstanding. Convertible into 3.3 shares of common stock, Issue price $100
§ 8% convertible preferred stock, $100 par, 2,572 shares outstanding. Convertible into 5 common shares, Issue price $80
§ 9,986 warrants are outstanding with an exercise price of $38. Each warrant is convertible into 1 share of common. Average market price of common is $52.00 per share.
§ Common shares outstanding at the beginning of the year were 40,045.
§ Net Income for the period was $200,000, while the tax rate was 40%.
What were the preferred dividends paid this whole year?
The correct answer was A.
(0.0625)(100)(2315) = 14469
0.08)(100)(2572) = 20576
14469 + 20576 = 35045
What was the after-tax interest charge?
The correct answer was A.
(.06125)(1000)(100)
(6125)(1 -0 .4) = 3675
How many new shares had to be issued to facilitate warrant conversion?
The correct answer was A.
9986 x $38 = $379,468
$379,468/$52 = 7297 common shares
9986 - 7297 = 2689 new common shares
What were the Basic EPS for the year?
The correct answer was A.
Basic EPS = （Net income - preferred dividends）/Wt Average shares of common = ($200,000 - $35045)/40,045 = 164955/40405 = 4.12
What were the Diluted EPS for the year?
The correct answer was A.
[($200,000 - $35,045) + $35,045 + $3,675]/(40,045 + 3,300 + 20,500 + 2689)
= $203,675/66534 shares = 3.06 | 
发表于 2006-4-27 16:30
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