The CCC (triple C) Venture has issued convertible preferred stock to its venture investors. Each share of preferred stock is convertible into 0.80 shares of common stock and pays an annual cash dividend of $0.25.
If each share of preferred stock has a market value of $4, what is the minimum price that a share of the CCC Venture’s common stock should be selling for (ignore the dividend yield on the preferred stock)?
Financial information for Retro Designs includes the following selected data:
| Net income (in millions) | $175 |
| Preferred stock (in millions) | $25 |
| Common shares outstanding (in millions) | 250 |
| Stock price | $10.00 |
What is the company’s price-earnings ratio?
A. 14.3
B. 16.7
C. 5.7
D. 15.0
During the year just ended, Berlin Co. had an outstanding 100,000 shares of common stock and 5,000 shares of noncumulative, $7 preferred stock. Each share of the latter is convertible into three shares of common. For the year, Berlin had $230,000 income from continuing operations and $575,000 of extraordinary losses; no dividends were paid or declared.
Berlin should report diluted earnings (loss) per share for income from continuing operations and for net income (loss), respectively, of:
A. $2.30 and ($3.45)
B. $2 and ($3)
C. $2.19 and ($3.29)
D. $2.26 and ($3.39)
