Bliss Ski
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 Roxy Bliss 75 245 Boot Size Down Linned Ski Boots  US $150.00
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 Roxy Bliss Womens Advanced Mountain Ski Boots NEW US $199.99
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Barbie I Can Be Skier Doll Playset
Sale Price: $21.99  |
DescriptionGirls can play out there favorite dream career.Each doll comes with access to special online content.Code inside each package unlocks career-themed content online.Includes doctor, and doctor bag; race driver and trophy; pet vet and puppy; rock star and guitar; and bride and bouquet... |
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Obermeyer Sheer Bliss Jacket -Kids
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DescriptionDescription |
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Obermeyer Bliss Bubble Jacket Toddler Girls
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DescriptionShell play all day in her own little bubble of warmth with the Obermeyer Bliss Bubble jacket The modern bubble design is playful and its filled with warm fluffy insulation to keep her comfortable even in the depths of winter Thanks to the I Grow system the jacket will grow with her Waterproof (5 000 mm) and breathable (5 000 g) Insulated with Feather Comfort (240 g body 200 g sleeve) ECOlicious fabric is made from over 50 percent recycled materials Removable hood Articulated elbows create a natural fit Soft touches include fleece earwarmers tricot lined pockets stretch fleece inner cuffs and fleece chin protector Alligator clip secures gloves to the jacket I Grow system lets you lengthen the sleeves by up to two inches |
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Marmot Bliss Jacket
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DescriptionMarmot's cute new Girl's Bliss Jacket is ideal for cooler spring weather, and its windproof fabric with water resistant (DWR) finish ensures your young lady will stay comfortable and warm. |
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All-Mountain Skier : The Way to Expert Skiing
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Description"Covers more information than a week's worth of private lessons."Ski magazine The All-Mountain Skier helps skiers advance their skills with a foolproof, self-instructional program for mastering advanced techniques in even the most challenging conditions... |
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Radar Bliss Waterski Glove
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DescriptionA woman's hand deserves something more. A glove built for slender fingers and hand shape. The Bliss is now 'convertible' to a fingerless style glove. It's as simple as cutting the tips of the fingers off between the sew lines... |
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Roxy Bliss Womens Ski Boots
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DescriptionRoxy Bliss Womens Ski Boots - The Roxy Bliss Ski Boots are loaded with features, the Roxy Bliss is warm featuring a full quilted down liner, which is the warmest natural material and provides great moisture protection... |
Effect of financing on earnings per share?
Effect of financing on earnings per share
Bliss Co., which produces and sells skiing equipment, is financed as follows:
Bonds payable, 6% (issued at face amount) 4,000,000
Preferred $2 stock (nonparticipating), $25 par
4,000,000
Common stock, $20 par
4,000,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $1,000,000, (b) $1,800,000, and (c) $3,200,000. Round all answers to nearest whole cent.
a)
b)
c)
In case I misread the question, here are my assumptions.
-Bond interest is paid once per year. $4M of bonds are outstanding.
-$4M of Preferred stock currently trades at $25/share and earns a $2/share annual dividend. There are $4M / $25 = 160,000 preferred shares outstanding.
-$4M of Common stock currently trades at $20/share. There are $4M / $20 = 200,000 common shares outstanding.
With those assumptions, here is the solution.
EPS = ( (1 - t) x (EBIT - (F x i)) - (d x M) ) / N
t = tax rate
EBIT = earnings before interest and taxes
F = face value of bonds
i = interest rate on bonds
d = dividend paid on each preferred share
M = number of preferred shares outstanding
N = number of common shares outstanding
a) EPS = ( (1 - .4) x (1,000,000 - (4,000,000 x .06)) - (2 x 160,000) ) / 200,000 = $0.68 per share
b) EPS = ( (1 - .4) x (1,800,000 - (4,000,000 x .06)) - (2 x 160,000) ) / 200,000 = $3.08 per share
c) EPS = ( (1 - .4) x (3,200,000 - (4,000,000 x .06)) - (2 x 160,000) ) / 200,000 = $7.28 per share
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