Consider the Following Data for ABC Inc for the Year

question 6

Essay

Consider the following data for ABC Inc for the year ended December 31st, 2014:
New ordinary shares issued
Number issued 100,000 Issue date March 1
Convertible preferred shares
Issue date carry forward from prior year Number issued 600,000
Conversion factor each share is convertible into one ordinary share Conversion during year 500,000 on July 1
Dividend rate $.05 per share per quarter, paid at the end of each quarter (March 31, June 30, Sept.30 Dec.31)
Convertible debentures
Par value $10,000,000
Issue date carry forward from prior year
Conversion factor each $1000 par value bond is convertible into 20 shares Conversion during year entire issue converted May 1
Annual interest rate 4%, payable semi-annually on November 1 and May 1
Warrants
Issue date carry forward from prior year
Exercise factor total warrants issued can be exchanged for 500,000 shares at a price of $60 per share Exercised during year: All warrants were exercised September 1
Avg.mkt.price from beginning of year to September 1: $66.101426 per share
Options
Issue date July 1
Exercise factor total options issued can be exchanged for 1,000,000 ordinary shares at $85 per share.Expiry date 10 years from date of issue
Exercised during year: none
Ordinary shares outstanding, Jan.1, 2014: 3,300,000
Year-end Dec.31, 2014:
Tax rate 40%
Pre-tax rate of return 18%
Average market price for the year $71 per shareNet income for 2014: $7,500,000 Required:
Compute ABC Inc's Basic and Fully Diluted EPS figures for the year ended December 31st, 2014.

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