Anchor, Inc. had income after taxes of $ for the current year. An average of
shares of Anchor's common stock was outstanding for the entire year, and shares were
outstanding at yearend. In addition, options were outstanding throughout the year to buy
shares of Anchor common stock at $ per share. During the year, Anchor's common stock
had an average market price of $ per share. The stock was selling for $ per share at yearend.
Anchor is subject to a percent tax rate and amortizes its bonds using a straightline method.
Anchor had the following convertible securities outstanding throughout the current year:
cumulative, convertible preferred stock. Each $ par value share is convertible into
common shares. A total of $ par value is outstanding.
percent, year, $ par convertible bonds that were issued at Total par value
outstanding is $ Each bond converts into shares of common stock.
percent, year, $ par convertible bonds that were issued at Total par value
outstanding is $ Each bond converts into shares of common stock.
percent, year, $ par convertible bonds that were issued at Total par value
outstanding is $ Each bond converts into shares of common stock.
An year, $ par convertible bonds that were issued at face value. The total par
value outstanding is $ Each bond converts into shares of common stock.
Required:
Calculate Anchor Inc.s basic and diluted EPS for the current year.
Note: Use straightline amortization for all the bonds. For example, if you have a year,
$ face value bond issued at and a $ discount at issue, then $ will be amortized
each period using straight line amortization. You would have the following:
