Ask Question
16 March, 15:18

The Hall Corporation had 100,000 shares of common stock outstanding at the beginning of the year. Hall issued 30,000 shares of common stock on May 1. On July 1, the company issued a 10% stock dividend. On September 1, Hall issued 1,000, 10% bonds, each convertible into 21 shares of common stock. What is the weighted average number of shares to be used in computing basic and diluted EPS, assuming the convertible bonds are dilutive?

+5
Answers (1)
  1. 16 March, 15:26
    0
    weighted average of outstanding shares. 124,000

    for diluted EPS: 145,000

    Explanation:

    beginning 100,000

    + 30,000 x 7/12 (May issued shares)

    + 13,000 x 6/12 (130,000 x 10% stock dividends)

    100,000 + 17,500 + 6,500 = 124,000 shares for the weighted average of outstanding shares.

    for the diluted earning per share:

    each bond can convert to 21 shares, potentially increasing the amount of shares outstanding to:

    1,000 x 21 = 21,000 new shares

    so for diluted EPS we will use:

    124,000 + 21,000 = 145,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The Hall Corporation had 100,000 shares of common stock outstanding at the beginning of the year. Hall issued 30,000 shares of common stock ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers