Reference no: EM132553832

Grouper Corporation reported Long-Term Liabilities and Shareholders' Equity in its December 31, 2020 balance sheet as follows:

Long Term Liabilities:

Bonds Payable$7,000,000 12% interest, convertible to 10 common shares/$1,000 bond

Bonds Payable$4,800,000 8% interest, convertible to 30 common shares/$1,000 bond

Shareholders' Equity:

Class A Preferred shares$5,000,000 $2.90 cumulative preferred share convertible into 8 common shares, 118,000 authorized, issued and outstanding

Class B Common shares$19,200,000 Unlimited number authorized 4,800,000 issued and outstanding

• All of the above reported bonds payable, preferred shares and common shares were outstanding throughout the entirety of fiscal 2020. No transactions involving the bonds payable, preferred shares or common shares occurred during fiscal 2020, except for interest on the bonds payable. The bonds payable were all issued and sold at par.
• Grouper also had Class B common stock options to purchase 210,000 common shares at $6.00 per share outstanding throughout fiscal 2020. No stock options were exercised during fiscal 2020.
• The fair market value of Grouper's common shares was $9.00 per share throughout the entirety of fiscal 2020. Grouper's income tax rate is 32%.
• The weighted average of common shares outstanding for 2020 was 4,800,000 common shares, and Grouper earned net income of $39,510,200.

Question 1: Calculate the income effect of the dividends on Class A preferred shares.

Question 2: Calculate Grouper's fiscal 2020 basic earnings per share

Question 3: Calculate the after-tax interest paid on the 12% bonds.

Question 4: Determine an incremental per share effect for 12% bonds.

Question 5: Calculate the after-tax interest paid on the 8% bonds.

Question 6: Determine an incremental per share effect for 8% bonds

Question 7: Determine an incremental per share effect for Class A preferred shares.

Question 8: Calculate the proceeds from assumed exercise of options.

Question 9: Calculate the incremental shares oustanding upon the exercise of options.

Question 10: Calculate Grouper's fiscal 2020 diluted earnings per shar