000 WARRANTS WITH AN EXERCISE PRICE OF $18.DURING THE YEAR

250,000 warrants with an exercise price of $18.During the year:On March 1, the company issued 100,000 new shares of common stock.On July 1, the board of directors declared a 15% stock dividend.On September 1, the company repurchased 125,000 shares.Net income (after-tax) for the year was $7,500,000.The company paid common dividends of $2,750,000 and preferred dividends of $1,300,000.The average market price for the common stock was $25 per share.Assume the fiscal year is January 1 through December 31. At year end, HalfPass's basic EPS is closest to:ض A)$1.77.غ B)$1.66.غ C)$1.94.ExplanationThe question is asking for basic EPS. Thus we can ignore the dilutive options and warrants.Basic EPS = (net income - preferred dividends) / weighted average common shares outstandingThe numerator = $7.5 million - $1.3 million = $6.2 millionCalculating the denominator is a bit more work (calculation detailed in table below):Event Notes Million Shares # months outstanding TotalBeginning Bal. (BB) 3.000 12 36.000New issue (March 01) 0.100 10 1.000Stock Dividend 15% on BB 0.450 12 5.400Stock Dividend 15% on new issue 0.015 10 0.150Repurchase (Sept .1) -0.125 4 -0.500Total 42.050Average shares = 42,050,000 / 12 = 3,504,167Basic EPS = $6.2 million / 3.504 million = $1.77

Question #60 of 90

Question ID: 414177

Selected information from Jupiter Corp.'s financial activities in the year 20X5 is as follows:Net income is $18,300,000.