Determine an incremental per share effect for bonds

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Reference no: EM132662864

Tamarisk Corporation had a net income for the current year ending December 31, 2021 of $1,208,000. Throughout 2021 the following items were outstanding:

399,000 common shares
21,000 Class A $3 cumulative preferred shares that were convertible to common shares at a rate of 1:1
49,500 Class B $4 non-cumulative preferred shares that were convertible at a rate of one common share for every two preferred shares.
$507,500, 8% bonds that were convertible to 14,500 common shares
$300,000, 10% bonds convertible to 9,500 common shares

No dividends were declared or paid in 2021. Tamarisk's tax rate is 25%.

Problem 1: Calculate the after-tax interest paid on the 10% bonds. After-tax interest on 10% bonds converted

Problem 2: Determine an incremental per share effect for 10% bonds.

Potentially dilutive security 10%
Incremental Numerator Effect ______
Incremental Denominator Effect ______
EPS ______

Problem 3: Determine an incremental per share effect for Class A

Potentially dilutive security Class A
Incremental Numerator Effect ______
Incremental Denominator Effect ______
EPS ______

Problem 4: Determine an incremental per share effect for Class B

Potentially dilutive security Class B
Incremental Numerator Effect ______
Incremental Denominator Effect ______
EPS ______

Reference no: EM132662864

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