Fox Co. reported $700,000 in net income, with a tax rate of 35% and 140,000 comm

Question

Fox Co. reported $700,000 in net income, with a tax rate of 35% and 140,000 common shares outstanding all year. Last year, Fox sold $3,000,000 of 6% long-term bonds at par which are still outstanding and are convertible into 60,000 shares of common stock. Fox has no other dilutive securities and no preferred stock. What is diluted EPS? $5.84 $3.50 $2.60 $4.09
Fox, Inc. offered an incentive stock plan to its employees by granting options for 160,000, $2 par common shares on January 1, Year 2018, with an exercise price of $11 and a current market price of $10 per common share. The options cannot be exercised before January 1, Year 2015, and expire on December 31, Year 2022. Each option has a value of $6 at the grant date based upon an option pricing model. On January 15, 2022, employees exercise 75% of the options when the market price of the stock was $15. How much will Fox debit to their cash account regarding these options in Years 2018 through 2022? $2,040,000 $1,200,000 $1,320,000 $1,800,000
Fox Co. reported $700,000 in net income, with a tax rate of 35% and 140,000 common shares outstanding all year. Last year, Fox sold $3,000,000 of 6% long-term bonds at par which are still outstanding and are convertible into 60,000 shares of common stock. Fox has no other dilutive securities and no preferred stock. What is diluted EPS? $5.84 $3.50 $2.60 $4.09
Fox, Inc. offered an incentive stock plan to its employees by granting options for 160,000, $2 par common shares on January 1, Year 2018, with an exercise price of $11 and a current market price of $10 per common share. The options cannot be exercised before January 1, Year 2015, and expire on December 31, Year 2022. Each option has a value of $6 at the grant date based upon an option pricing model. On January 15, 2022, employees exercise 75% of the options when the market price of the stock was $15. How much will Fox debit to their cash account regarding these options in Years 2018 through 2022? $2,040,000 $1,200,000 $1,320,000 $1,800,000
Fox Co. reported $700,000 in net income, with a tax rate of 35% and 140,000 common shares outstanding all year. Last year, Fox sold $3,000,000 of 6% long-term bonds at par which are still outstanding and are convertible into 60,000 shares of common stock. Fox has no other dilutive securities and no preferred stock. What is diluted EPS? $5.84 $3.50 $2.60 $4.09
Fox, Inc. offered an incentive stock plan to its employees by granting options for 160,000, $2 par common shares on January 1, Year 2018, with an exercise price of $11 and a current market price of $10 per common share. The options cannot be exercised before January 1, Year 2015, and expire on December 31, Year 2022. Each option has a value of $6 at the grant date based upon an option pricing model. On January 15, 2022, employees exercise 75% of the options when the market price of the stock was $15. How much will Fox debit to their cash account regarding these options in Years 2018 through 2022? $2,040,000 $1,200,000 $1,320,000 $1,800,000 Fox, Inc. offered an incentive stock plan to its employees by granting options for 160,000, $2 par common shares on January 1, Year 2018, with an exercise price of $11 and a current market price of $10 per common share. The options cannot be exercised before January 1, Year 2015, and expire on December 31, Year 2022. Each option has a value of $6 at the grant date based upon an option pricing model. On January 15, 2022, employees exercise 75% of the options when the market price of the stock was $15. How much will Fox debit to their cash account regarding these options in Years 2018 through 2022? $2,040,000 $1,200,000 $1,320,000 $1,800,000

Explanation / Answer

Net Income $700,000 Less: Preferred dividend $0 Add Convertible Bond interest*(1-Tax Rate) $117,000 (3000000*0.06)*(1-0.35) Adjusted Earnings $817,000 Average number of common shares outstanding 140000 Add:Number of shares to be issued on conversion 60000 Adjusted common shares 200000 Dilluted EPS $4.09 (880000/200000) Answer: $4.09 Exercise price of option $11 Total number of options granted 160000 Number of options exercised at price per share=$11 120000 (160000*0.75) Amount of cash received $1,320,000 (120000*11) Amount of debit to cash account $1,320,000 Answer: $1,320,000

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.