Ask Experts Questions for FREE Help!
 
Free Answers in 3 Easy Steps

Register Now		 3 Steps
 
Ask QuestionsprogressAnswer QuestionsprogressBuild ReputationprogressBecome an Expert
 
At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to:
  • Get free answers from experts in any of our 300+ topics.
  • Accept money for answers that you provide.
  • Communicate privately with other members (PM).
  • See fewer ads.
  Answer this Question    Ask about Accounting    Ask about another Subject  
 
PDA

aahuja1
Oct 31, 2007, 02:15 PM
Here are my questions and what I came up with. Please let me know if this is correct or point me in the right direction, thanks.

a. For the year ended December 31, 2005, Finco, Inc., reported an earnings per share of $3.12. During 2006 the company had a 3-for-1 stock split. Calculate the 2005 earnings per share that will be reported in Finco's 2006 annual report for comparitive purposes.

Here I did the following 3.12 / 3 = $1.04/share Correct?

b. During 2007 Finco had a 2-for-1 stock split. Calculate the 2005 earnings per share that will be reported in Finco's 2007 annual report for comparitive purposes.

Here I did the following 3.12 / 2 = $1.56/share Correct? however there are two years gone by here so I wasn't sure.

c. If Finco had issued a 10% stock dividend in 2006 and did not have a stock split, calculate the 2005 earnings per share that will be reported in Finco's 2006 annual report for comparitive purposes. Round your answer to 2 decimal places.

Here I did the following 3.12 * .9 = 2.808 = $2.81/share


Did I get anything right? Or am I just second guessing myself?
Hermansherman
Nov 1, 2007, 05:36 AM
Here are my questions and what I came up with. Please let me know if this is correct or point me in the right direction, thanks.

a. For the year ended December 31, 2005, Finco, Inc., reported an earnings per share of $3.12. During 2006 the company had a 3-for-1 stock split. Calculate the 2005 earnings per share that will be reported in Finco's 2006 annual report for comparitive purposes.

Here I did the following 3.12 / 3 = $1.04/share Correct?

b. During 2007 Finco had a 2-for-1 stock split. Calculate the 2005 earnings per share that will be reported in Finco's 2007 annual report for comparitive purposes.

Here I did the following 3.12 / 2 = $1.56/share Correct? however there are two years gone by here so I wasn't sure.

c. If Finco had issued a 10% stock dividend in 2006 and did not have a stock split, calculate the 2005 earnings per share that will be reported in Finco's 2006 annual report for comparitive purposes. Round your answer to 2 decimal places.

Here I did the following 3.12 * .9 = 2.808 = $2.81/share


Did I get anything right? Or am I just second guessing myself?
a. I agree
b. The split in 2007 is after the split in 2006, so I would use 3.12/3/2 = .52
c. I would use 3.12/1.1 = 2.84