Q1. An analyst compiled the following information from Hampshire, Inc.’s financial activities in the most recent year: § Net income was $2,800,000. § 100,000 shares of common stock were outstanding on January 1. § The average market price per share for the year was $250. § 10,000 shares of 6%, $1,000 par value preferred shares were outstanding the entire year. § 10,000 warrants, which allow the holder to purchase 10 shares of common stock for each warrant held at a price of $150 per common share, were outstanding the entire year. § 30,000 shares of common stock were issued on September 1. Hampshire, Inc.’s diluted earnings per share are closest to: A) $14.67. B) $18.38. C) $20.00.
Q2. Selected information from Feder Corp.’s financial activities for the year is as follows: § Net income was $7,650,000. § 1,100,000 shares of common stock were outstanding on January 1. § The average market price per share was $62. § Dividends were paid during the year. § The tax rate was 40%. § 10,000 shares of 6% $1,000 par value preferred shares convertible into common shares at a rate of 20 common shares for each preferred share were outstanding for the entire year. § 70,000 options, which allow the holder to purchase 10 shares of common stock at an exercise price of $50 per common share, were outstanding the entire year. Feder Corp.’s diluted earnings per share (EPS) was closest to: A) $5.87. B) $5.32. C) $4.91.
Q3. In applying the treasury stock method, if warrants allow the purchase of 1 million shares at $42 per share when the average price is $56 per share, how many shares will be added to the firm’s weighted average number of shares outstanding? A) 250,000. B) 1,000,000. C) 420,000.
Q4. Cassie Hamilton is an analyst with Pacers Worldwide, an investment banking firm. She just received the following information (as of year-end) for Trotters Diversified: § Average common shares outstanding of 5.0 million. § Average market price for common stock of $35.00 per share. § Net income of $9.0 million. § Common stock dividends paid of $1.2 million. § Preferred dividends paid (on convertible preferred stock noted below) of $1.5 million. § Tax rate of 40%. § 500,000 shares of cumulative convertible preferred stock with $30 par value and 10% dividend. Each preferred share is convertible into 5 common shares. § 10,000 convertible $1,000 par bonds with a 6.0% coupon, each convertible into 8 shares of common stock. § 400,000 stock options recently issued with an exercise price of $32.00 per share. In the denominator of the basic EPS calculation, Hamilton should include how many shares related to the convertible bonds?
A) 0. B) 80,000. C) 10,000.
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发表于 2009-1-17 09:41
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