Reference no: EM132919246

Question - On 1/1/19 Karitas Inc., a calendar year company, has 725,000 common shares outstanding. Over the course of the fiscal year, the company experiences the following events:

Common stock related events:

3/1/2019 issues 108,750 common shares

5/1/2019 Distributes a 10.00% stock dividend.

8/1/2019 Purchases 60,000 shares of treasury stock.

10/1/2019 issues a 2 for 1 stock split

The firm also has the following securities outstanding for the entire year (all conversion rates already reflect the effect of the stock dividend and stock split): 50,000 shares of convertible preferred stock. The convertible preferred stock has a par value of $10 per share, pays a 15.00% dividend and is convertible into 3 shares of common stock.

Convertible bonds with an aggregate par value of $7,000,000. The bonds are sold in increments of $1,000; pay a 7.00% coupon and are convertible into 100 shares of common stock.

150 call option contracts with a strike price of $11.00 per share. Each option contract is exercisable into 140.00 shares of common stock. The average stock price over the fiscal year is $20.00 per share

The firm has net income of $5,800,000 and the corporate tax rate is 21.00%.

A) Calculate the weighted average number of shares outstanding at 12/31/19?

B) Calculate basic EPS?

C) Calculate whether each security in the firm's capital structure is dilutive?

D) Calculate fully-diluted EPS?