During all of 2011 Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2011, the company issued 10,000 7 percent convertible bonds at par. The maturity value of each bond is $1,000. Each bond is convertible into 20 shares of common stock. None were converted during 2011.
Dawson also had 60,000 stock warrants outstanding for all of 2011. The option price is $10 per share. The market price of the common stock was $40 on December 31, 2011, and the average market price for 2011 was $30.
Dawson reported a net income of $3,650,000 for 2011. Assume the company had a 40 percent income tax rate.

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The Answer of During all of 2011 Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2011, the company issued 10,000 7 percent convertible bonds at par. The maturity value of each bond is $1,000. Each bond is convertible into 20 shares of common stock. None were converted during 2011.
Dawson also had 60,000 stock warrants outstanding for all of 2011. The option price is $10 per share. The market price of the common stock was $40 on December 31, 2011, and the average market price for 2011 was $30.
Dawson reported a net income of $3,650,000 for 2011. Assume the company had a 40 percent income tax rate.

During All of 2011 Dawson Manufacturing Company Had 950,000 Shares