# EPS

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

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

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?

Stock dividend and stock splits effect the entire year

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

A is correct.

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

nope. that is the distractor part on this question…

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

OH!! isee :> THANKS A LOT