EPS

CFA Level I
#1

The company had 2 million shares outstanding at dec 31, 2000 March 31,2001, company paid stock dividend of 10% June 30,2001 company sold $10 million of 7% convertible debentures, convetible into common at $5 per share Sept 30, 2001 the company issued and sold 100,000 shares of common stock at par The 2001 basic EPS will be calculated on: A) 2,225,000 shares B) 2,250,000 C) 3,225,000 D) 3,250,000

#2

I meant A 2,000,000 * 12/12 * 1.1 + 100,000 * 3/12 = 2,225,000

#3

so a stock dividend would effect the entire year? Even if its issued on Dec 1, 2001, do we assume it will effect Jan 1 2001 - to Dec 31, 2001?

#4

Stock dividend and stock splits effect the entire year

#5

(2.2*12 + 0.1*3)/12 = 2.225 = A - Dinesh S

#6

A is correct.

#7

I want to ask: The question is asking EPS not dilute EPS. Do I need to add the convertible debts?why?

#8

nope. that is the distractor part on this question…

#9

keung, no you don’t. and nobody did it. the company had stocks outstanding then stock dividend then issued stocks. i don’t see any convertible debt calculations in latter. the convertible debt is extra info

#10

OH!! isee :> THANKS A LOT