AuthorTopic: diluted eps
@2012-03-06 01:06:00
given R.E. of 100,000,
5,000 shares of common with a par value of $20,
1,000 shares of 10% cumul. pref. stock with a par of $100 and a liquidation value of $110.
The preferred is 4 years in arrears (no idea how this affects anything)
what is Book value per share? (which i assume means diluted eps) - thanks.
By the way, the choices are $25, $30, $32, and $33 -- answer is 30
@2012-03-12 06:55:00
Dividends have to be paid to the pref.s:

5x 10%x 1000x100 = 50,000 ( 5 years-- 4 years in arrear plus current year)

After div. paid out, remaining R.E is 50,000, distributed to 5000 shares common stocks, which means $10 per share.

$10 ( R.E. available per share) + $20 (par value) = $30 ( book value)

Here is just my thought. Please correct me if it is wrong.
@2012-05-05 20:10:08
How did u get 5 in 5*10%*1000*100. there is no such no mentioned.
@2012-05-12 13:40:05
Shouldn't it be =retained earning pr share + common stock per share = (1000 shares* 100*0.1/1000)+20=30

CFA Discussion Topic: diluted eps

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