During Year 2, ABC Inc

question 103

Essay

During Year 2, ABC Inc.reported net income of $2,800,000.The company had no preferred shares outstanding.At the start of Year 2, the company had 100,000 stock options outstanding, half of which were exercised on April 1st, Year 2.The exercise price of the option was $10 per share, and the average market price was $12.50 per share.
On May 1, Year 2, the company issued $2,500,000 worth of 10% debentures, 60% of which were converted into 60,000 common shares on July 1, Year 2.The bonds that were not converted were convertible into 40,000 common shares.The company had 1,000,000 shares outstanding at the start o Year 2 and is subject to a tax rate of 25%.
Required: Compute the company's basic and fully diluted EPS figures for year 2.

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Definitions:

Select a Strategy

involves choosing a specific plan or approach in order to achieve a goal or solve a problem.

Intervention

An action or process of intervening, which often implies stepping into a situation to change the outcome or influence the course of events, typically with the aim of improving or helping.

Planning Process

A systematic series of steps designed to develop strategies for achieving defined objectives.

Generalist Intervention Model

A social work practice model that involves understanding, assessing, and addressing problems across different levels (individuals, families, groups, communities).