Question
In: Math
Net income for the company for the year was $300,000, and 100,000 shares of common stock...
Net income for the company for the year was $300,000,
and 100,000 shares of common stock were outstanding during the
year. The income tax rate is 30%. For each of the following
potentially dilutive securities, perform the shortcut antidilution
test to determine whether the security is dilutive. Assume that
each of the securities was issued on or before January 1. Treat
each security independently; in other words, when testing one
security, assume that the others do not exist.
(10)
1. 10,000 convertible preferred shares (cumulative, 5%, $100 par).
Each preferred share is convertible into three shares of common
stock.
2. 500 convertible bonds ($1,000 face value, 10%). Each bond is
convertible into 25 shares of common stock.
3. 20,000 convertible preferred shares (cumulative, 10%, $50 par).
Each preferred share is convertible into two shares of common
stock.
4. 2,000 convertible bonds ($1,000 face value, 8%). Each bond is
convertible into 15 shares of common stock.
(b) Is It Possible For A Company To Have Positive Cash Flow But
Still Be In Serious Financial Trouble?
Solutions
milcah answered 2 years agoRelated Solutions
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