 # EPS Question

XYZ Corp. had 100,000 sh outstanding common stock at beginning of the year. May 1, it issued 30,000 sh common stock July 1, it issued a 10% stock dividend Sept. 1, it issued 1,000, 10% bonds - each convertible into 21 sh of common stock What is the weighted average number of shares to compute basic & diluted EPS? Assume the convertible bonds are dilutive? What would be the total weight here? Thx.

Basic: 1/1 100000 * 12/12 * 1.1 = 110000 5/1 30000 * 7/12 *1.1 = 19250 7/1 10% 9/1 1000 * 4/12 = 333 Total Basic WASO : 129583 Diluted: 110000 + 19250 + 333 * 21=136243 not sure though

cpk123, why would it be 7/12 for the May 1st lot? Looks to me to be 132K and 139K

sorry 8/12

The answer sheet shows: Basic WASO: 132,000 Diluted WASO: 139,000 cpk123, do you mind telling me where’s the fraction number of 12/12; 7/12 etc. coming from? I won’t be abel to go through the chunky book now. Thx much.

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Basic # of shares: 100K*1.1*4/12+(100k+30K)*1.1*8/12=132K Diluted # of shares: 100K*1.1*4/12+(100K+30K)*1.1*4/12+((100k+30K)*1.1+1K*21)*4/12=139K Please confirm if correct.

map1, yours looks correct and very easy to understand.

map1 Wrote: ------------------------------------------------------- > Basic # of shares: > > 100K*1.1*4/12+(100k+30K)*1.1*8/12=132K > > Diluted # of shares: > > 100K*1.1*4/12+(100K+30K)*1.1*4/12+((100k+30K)*1.1+ > 1K*21)*4/12=139K > > Please confirm if correct. Your answer is absolutely correct! Again my jerky question: where’s the 12 come from? Thx.

100000*4/12=33334 130000*4/12=43333 151000*4/12=50334 dividends: 10000*12/12=10000 3000*8/12=2000 total 139000

hyang: the 12 comes from the number of months in a year

forumreader Wrote: ------------------------------------------------------- > hyang: the 12 comes from the number of months in a > year Thx very much. Can’t believe I’m stuck here…