Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS. The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares , bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS. Given information: Net income: $50,000. Dilutive options: 1,000. Exercise price: $6. Shares: 10,000. Market price: $20. (a) To compute: To compute diluted EPS (Round to nearest cent).

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Answer 1

Question

Chapter 16, Problem 26E

To determine

Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.

The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares, bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS.

Given information: Net income: $50,000.

Dilutive options: 1,000.

Exercise price: $6.

Shares: 10,000.

Market price: $20.

(a) To compute: To compute diluted EPS (Round to nearest cent).

To determine

(b) To compute: To compute average market price during the last 3 months.

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Answer 2

Question

Chapter 16, Problem 26E

To determine

Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.

The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares, bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS.

Given information: Net income: $50,000.

Dilutive options: 1,000.

Exercise price: $6.

Shares: 10,000.

Market price: $20.

(a) To compute: To compute diluted EPS (Round to nearest cent).

To determine

(b) To compute: To compute average market price during the last 3 months.

Expert Solution & Answer

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Answer 3

Question

Chapter 16, Problem 26E

To determine

Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.

The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares, bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS.

Given information: Net income: $50,000.

Dilutive options: 1,000.

Exercise price: $6.

Shares: 10,000.

Market price: $20.

(a) To compute: To compute diluted EPS (Round to nearest cent).

To determine

(b) To compute: To compute average market price during the last 3 months.

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Answer 4

Question

Chapter 16, Problem 26E

To determine

Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.

The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares, bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS.

Given information: Net income: $50,000.

Dilutive options: 1,000.

Exercise price: $6.

Shares: 10,000.

Market price: $20.

(a) To compute: To compute diluted EPS (Round to nearest cent).

To determine

(b) To compute: To compute average market price during the last 3 months.

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Answer 5

Chapter 16, Problem 26E

To determine

Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.

The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares, bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS.

Given information: Net income: $50,000.

Dilutive options: 1,000.

Exercise price: $6.

Shares: 10,000.

Market price: $20.

(a) To compute: To compute diluted EPS (Round to nearest cent).

To determine

(b) To compute: To compute average market price during the last 3 months.

Answer 6

Chapter 16, Problem 26E

To determine

Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.

The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares, bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS.

Given information: Net income: $50,000.

Dilutive options: 1,000.

Exercise price: $6.

Shares: 10,000.

Market price: $20.

(a) To compute: To compute diluted EPS (Round to nearest cent).

Answer 7

Chapter 16, Problem 26E

To determine

Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.

The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like preference shares, bonds will be exercised. Diluted EPS takes the calculation a step further and is more detailed than the Basic EPS.

Given information: Net income: $50,000.

Dilutive options: 1,000.

Exercise price: $6.

Shares: 10,000.

Market price: $20.

(a) To compute: To compute diluted EPS (Round to nearest cent).

Answer 8

To determine

(b) To compute: To compute average market price during the last 3 months.

Answer 9

To determine

(b) To compute: To compute average market price during the last 3 months.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 16 - Prob. 1Q Ch. 16 - 2. Briefly explain why corporations issue...Ch. 16 - 3. Discuss the similarities and the differences...Ch. 16 - 4. Bridgewater Corp. offered holders of its 1,000...Ch. 16 - 5. Explain how the conversion feature of...Ch. 16 - Prob. 6Q Ch. 16 - Prob. 7Q Ch. 16 - Prob. 8Q Ch. 16 - Prob. 9Q Ch. 16 - Prob. 10Q

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(b) To compute: To compute average market price during the last 3 months.

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