AMIS 522 Spring 2008 Exam 3 w Answers

# AMIS 522 Spring 2008 Exam 3 w Answers - Name Graduating...

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6. If you are still in the room when I call time, stop writing immediately and place your writing instrument on the desk. Failure to do so will cost you 25 points. 7. Any instances of cheating or copying from neighbors will result in a grade of 0 for the exam. 8. If you finish early, check your work to avoid careless errors. If you wish to leave, place your exam in the box on my desk and leave quietly in consideration of those remaining. 9. Grades will be available in Carmen no later than June 9th. Good luck! 10. Points will be assigned to the Exam as follows: 25 objective questions @ 4 points each = 100 Problem 26 = 25 Problem 27 = 25 Problem 28 = 25 Problem 29 = 25 TOTAL POINTS 200 1. When we assume conversion of convertible bonds, the numerator is increased by: A) The amount of after-tax interest. B) The gross amount of interest. C) The weighted-average interest. D) The amount of cash paid during the current year for interest. Use the following to answer questions 2-3: Alpha Corporation had 100,000 shares of common stock and 10,000 shares of 8%, \$100 par convertible preferred stock outstanding during the year. Net income for the year was \$500,000 and dividends were paid to both common and preferred shareholders. Alpha's effective tax rate is 40%. Each share of preferred stock is convertible into 5 shares of common. 2. What is Alpha's diluted EPS? A) \$4.20 B) \$3.33 C) \$3.65 D) \$4.52 Page 2
3. What is Alpha's basic EPS? A) \$3.33. B) \$4.52. C) \$5.00. D) \$4.20. 4. The net assets of a corporation equal to: A) Contributed capital.

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