VII 14 points Blue and Gold Company had the following capital structure

# Vii 14 points blue and gold company had the following

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Problem VII. (14 points) Blue and Gold Company had the following capital structure: 12/31/2013 12/31/2012 Common Stock, \$10 par value 1,200,000 shares 400,000 shares Preferred Stock, 10%, cumulative, \$100 par value 10,000 shares 10,000 shares 5% Convertible Bonds \$1,000,000 \$1,000,000 Additional information regarding the company:On March 1, 2013, the company sold 200,000 shares of common stock. On October 1, 2013, the company sold 600,000 shares of common stock. On November 1, 2013, the company bought 200,000 shares of common stock at \$20 per share in the open market. The shares were to be held as Treasury Stock. On December 1, 2013 there was a 20% stock dividend. Net income for the year ended December 31, 2013 was \$1,500,000. The dividend on the preferred stock was declared and paid during 2013. There were 20,000 stock options outstanding throughout all of 2013. Each option entitled the holder to purchase 1 share of common stock at \$50 per share. The average market price of the company’s common stock was \$75 per share during 2013. The options are exercisable from January 1, 2012 through January 1, 2015. To date, none have been exercised. The bonds were originally issued at par. Each \$1,000 bond can be converted into 100 shares of common stock. To date, none have been converted. The company’s effective tax rate was 30% in 2012 and 2013. Required: Prepare all of the earnings per share calculations that must be presented for the company for the year ended December 31, 2013. Show all supporting calculations, use labels and good form in your answer.
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