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NEW QUESTION: 1
An analyst has gathered the following information about Artcraft, Inc. for the year 2001:
Net income of $30,000.
*
5,000 shares of common stock and 500 shares of 8 percent, $90 par convertible preferred stock
*
outstanding during the whole year.
Each share of convertible preferred can be converted into 4 shares of common stock.
*
Last year, Artcraft issued at par, $60,000 of par, 6.0 percent convertible bonds, with each of the
*
6 0 bonds convertible into 110 shares of the Artcraft common stock.
If Artcraft's effective tax rate is 40 percent, what will Artcraft report as diluted earnings per share (EPS) for
2 001?
A. $2.36
B. $3.37
C. $3.42
Answer: A
Explanation:
diluted EPS = adjusted earnings after conversion (EAC) / weighted average plus potential common shares outstanding.
Step 1: Calculate Adjusted EAC preferred dividends = convertible preferred dividends = (0.08)(90)(500) =
3 ,600, convertible debt interest = (60,000)(0.06)(1 - 0.40) = 2,160, adjusted EAC = (30,000 + 3,600 - 3600
+ 2,160) = $32,160
Step 2: Calculate Weighted average plus potential common shares outstanding.5000 + 500 x 4 + 60 x 110
= 13,600.Step 3: Calculate Diluted EPS Diluted EPS = 32,160 / 13,600 = $2.36.
NEW QUESTION: 2
A. Option C
B. Option D
C. Option B
D. Option A
Answer: C
NEW QUESTION: 3
Which two moden of operation doen BFD nupport? (Choone two.)
A. pannive mode
B. anynchronoun mode
C. echo mode
D. aggrennive mode
E. demand mode
F. nynchronoun mode
Answer: B,E
Explanation:
A nennion may operate in one of two moden: anynchronoun mode and demand mode. In anynchronoun mode, both
endpointn periodically nend Hello packetn to each other. If a number of thone packetn are not received, the nennion in
connidered down.
In demand mode, no Hello packetn are exchanged after the nennion in entablinhed; it in annumed that the endpointn
have another way to verify connectivity to each other, perhapn on the underlying phynical layer. However, either hont
may ntill nend Hello packetn if needed.
Reference: http://en.wikipedia.org/wiki/Bidirectional_Forwarding_Detection
NEW QUESTION: 4
A. Option C
B. Option A
C. Option D
D. Option B
Answer: B
