A Firm Had 8,000 Common Shares Outstanding at the End

question 59

Multiple Choice

A firm had 8,000 common shares outstanding at the end of the current period and earned $8,000 that period (net of tax) .Also,options to purchase 5,000 shares at $5 each were outstanding all year.For the entire year the firm had $20,000 of 6% debt and $10,000 of 8% debt outstanding.The 8% debt is convertible into 500 common shares.The firm earns interest at 7 percent and has a 50 percent tax rate.The diluted earnings per share for the current year should be (rounded to the nearest cent) :

• A) $1.00
• B) $0.69
• C) $0.65
• D) $0.72

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Definitions:

Balance and Perspective

Maintaining a healthy equilibrium in various aspects of life or work while considering different viewpoints or aspects of a situation.

Goal Setting Process

The development of an action plan designed to motivate and guide a person or group toward a goal.

SMART Goal

A framework for setting goals that are Specific, Measurable, Achievable, Relevant, and Time-bound, enhancing clarity and tracking progress.

Ethics Test

A method or procedure used to evaluate the ethical standards or principles of individuals or situations.