Calculate earnings per share

Reference no: EM1359034

1. Southland Industries has $60,000 of 16% (annual interest) bonds outstanding, 1,500 shares of preferred stock paying an annual dividend of $5 per share, and 4,000 shares of common stock outstanding. Assuming that the firm has a 40% tax rate, compute earnings per share (EPS) for the following levels of EBIT:
a. $24,600
b. $30,600
c. $35,000

2. Weathers Catering Supply, Inc. needs to borrow $150,000 for 6 months. State Bank has offered to lend the funds at a 9% annual rate subject to a 10% compensating balance. (Note: Weathers currently maintains $0 on deposit in State Bank). Frost Finance Co. has offered to lend the funds at a 9% annual rate with discount-loan terms. The principal of both loans would be payable at maturity as a single sum.
a. Calculate the effective annual rate of interest on each loan.
b. What could Weathers do that would reduce the effective annual rate on the State
Bank loan?

Reference no: EM1359034

Questions Cloud

Discuss whether you accept demand from manager : Discuss whether you should accept this demand from your manager or whether you should persuade your team to give their time to the organization rather than to their families. What factors might be significant in your decision?

Describe the size of public sector borrowing : Describe the size of public sector borrowing/public sector debt requirement. Autonomous consumption is 10 billion the marginal propensity to consume.

Explain why are you using the equation in the first place : Explain why are you using the equation in the first place and What is the solution supposed to tell you once you find it

Fiedlers contingency theory of leadership : In analyzing the interaction between task oriented leadership and situational characteristics associated within an organization, can you explain the impact of this interaction on the effectiveness as a leader please?

Calculate earnings per share : Southland Industries has $60,000 of 16 percent bonds outstanding, 1,500 shares of preferred stock paying an yearly dividend of $5 per share, and 4,000 shares of common stock outstanding.

What is the angle of refraction into carbon tetrachloride : Cube of ice is taken from the freezer at -8.5°C and placed in a 75-gram aluminum calorimeter filled with 300.0 grams of water at room temperature of 20.0°C. The final situation is observed to be all water at 17°C. What was the mass of the ice cub..

Competency processes : first part of the paper but can't seem to find good information to complete

Employee business expenses and agi limit : Sarah incurred employee business expenses of $5,000 consisting of $3,000 business meals and $2,000 customer entertainment. She provided an adequate accounting to her employer's accountable plan and received reimbursement for one-half of the total ..

Illustrate what is your optimal price and quantity : Suppose that your production facility can only produce 1,000,000 pills per year. Illustrate what is your optimal price and quantity given the production constraint.

User Account

All Pages