Prince Corp

question 21

Essay

Prince Corp.has the following balance sheet information at December 31,2014.

The convertible bonds were issued at par on April 1,2014 and are convertible into Prince's common stock at a ratio of 25 shares of stock to 1 bond.Prince did not have any treasury stock at December 31,2013 and purchased the 9,000 shares evenly throughout 2014.The average price of the common stock for the year was $40,and the year end price was $45.
Prince Corp.also has 60,000 outstanding and exercisable qualified employee stock options.Employees obtain one share of stock for each option exercised.The exercise price for each option is $21 per share.
Prince's net income for the year ended 2014 was $292,500.Its tax rate for the year was 35%.
Required:
1.Compute basic EPS for the year ended December 31,2014.Show all computations.
2.Compute diluted EPS for the year ended December 31,2014.Show all computations.

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Definitions:

Stress

The set of behavioral, mental, and physical processes that occur as an organism attempts to deal with an environmental event or a stimulus that it perceives as threatening.

Memory Loss

The inability to remember information or experiences, which can be temporary or permanent, and is often associated with aging or conditions like Alzheimer's disease.

Acetylcholine Pathways

Neural pathways that make use of acetylcholine as their neurotransmitter, playing crucial roles in the function of the autonomic nervous system and muscle control.

HPA Activation

The initiation of the Hypothalamic-Pituitary-Adrenal axis response, a major part of the stress response system that regulates many body processes.