EPS: Simple capital structure
On 1st January, 2012, Bailey Industries had stock outstanding as follows.
6% Cumulative preferred stock, $103 par value,
issued and outstanding 10,800 shares $1,112,400
Common stock, $11 par value, issued and
outstanding 280,800 shares 3,088,800
To get the net assets of three smaller companies, Bailey authorized the issuance of an additional 180,000 common shares. The acquisitions took place as shown below.
Date of Acquisition Shares Issued
Company A April 1, 2012 60,000
Company B July 1, 2012 82,800
Company C October 1, 2012 37,200
On May 14, 2012, Bailey realized a $92,400 (before taxes) insurance gain on the expropriation of investments initially purchased in 2000.
On 31st December, 2012, Bailey recorded net income of $361,200 before tax and exclusive of the gain.
Consider a 47% tax rate; compute the earnings per share data that should appear on the financial statements of Bailey Industries as of December 31, 2012. Assume that the expropriation is extraordinary.
Bailey Industries
Income Statement
For the year ended December 31, 2012
Income Before Extraordinary Item $____________
Extraordinary Gain per Share $____________
Net Income $____________