Philosophy homework help
Philosophy homework help. Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate that it will enable them to earn an additional $600,000 after tax. What would be the impact on earnings per share if the raise the $1,000,000 by:a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be converted into 10 shares of Peyton common stock b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into 5 shares of Peyton common stock c) $500,000 of each of the above?Net Income 12,363,732.51Less: Preferred Dividends 50,000.00Earnings Available to Common Shareholders 12,313,732.51Common Shares Outstanding 1,750,000.00Basic EPS 7.04A. If all preferred shares are converted: Net Income 12,363,732.51 Additional Common Shares ?Common Shares Outstanding after conversion ?EPS if preferred shares converted ?Preferred shares are antidilutive ? B. If all bonds are converted:Net Income 12,363,732.51Less: Preferred Dividends 50,000.00Add back interest on bonds, net of income tax ?Earnings Available to Common Shareholders ?Additional Common Shares ?Common Shares Outstanding after conversion ?
