Q50. The Fischer Company had net income of $1,500,000. Fischer paid preferred dividends of $5 on each of the 100,000 preferred shares. There are 1 million Fischer common shares outstanding. In addition to the common and preferred stock, Fischer has $25 million of 4% bonds outstanding. The face value of each bond is $1,000. Each bond is convertible into 40 common shares. If Fischer's tax rate is 40%, determine its basic and diluted earnings per share (EPS)?

          Basic EPS                           Diluted EPS

A) $1.00                                          $1.25

B) $1.50                                          $1.25

C) $1.00                                          $0.80

Q51. Assume that the exercise price of an option is $9, and the average market price of the stock is $12. Assuming 992 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the Diluted EPS?

A)   744.

B)   248.

C)   992.

Q52. Assume that the exercise price of an option is $6, and the average market price of the stock is $10. Assuming 802 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the diluted earnings per share (EPS)?

A)   321.

B)   481.

C)   802.

Q53. Assume that the exercise price of an option is $10, and the average market price of the stock is $13. Assuming 999 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the diluted earnings per share (EPS)?

A)   768.

B)   231.

C)   999.

Q54. Assume that the exercise price of an option is $11, and the average market price of the stock is $16. Assuming 1,039 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the Diluted EPS?

A)   714.

B)   1,039.

C)   325.

答案和详解如下：

Q50. The Fischer Company had net income of $1,500,000. Fischer paid preferred dividends of $5 on each of the 100,000 preferred shares. There are 1 million Fischer common shares outstanding. In addition to the common and preferred stock, Fischer has $25 million of 4% bonds outstanding. The face value of each bond is $1,000. Each bond is convertible into 40 common shares. If Fischer's tax rate is 40%, determine its basic and diluted earnings per share (EPS)?

          Basic EPS                           Diluted EPS

A) $1.00                                          $1.25

B) $1.50                                          $1.25

C) $1.00                                          $0.80

Correct answer is C)

Q51. Assume that the exercise price of an option is $9, and the average market price of the stock is $12. Assuming 992 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the Diluted EPS?

A)   744.

B)   248.

C)   992.

Correct answer is B)

(992)($9) = $8928
$8928 / 12 = 744
992 − 744 = 248 new shares or [(12 − 9) / 12]992 = 248

Q52. Assume that the exercise price of an option is $6, and the average market price of the stock is $10. Assuming 802 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the diluted earnings per share (EPS)?

A)   321.

B)   481.

C)   802.

Correct answer is A)

(802)(6) = 4,812

4,812 / 10 = 481.2

802 − 481 = 321 or [(10 − 6) / 10] × 802 = 321

Q53. Assume that the exercise price of an option is $10, and the average market price of the stock is $13. Assuming 999 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the diluted earnings per share (EPS)?

A)   768.

B)   231.

C)   999.

Correct answer is B)

(999)(10) = 9,990
9,990 / 13 = 768
999 − 768 = 231

Q54. Assume that the exercise price of an option is $11, and the average market price of the stock is $16. Assuming 1,039 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the Diluted EPS?

A)   714.

B)   1,039.

C)   325.

Correct answer is C)

(1,039 options)($11) = $11,429
$11,429 / $16 per share
1039 − 714 = 325 shares or [(16 − 11) / 16]1,039 = 325.

thx

thanks