Garfun, Inc , owns all of the stock of Simon, Inc For 2018, Garfun reports income (exclusive of any investment income) of $480,000 Garfun has 80,000 shares of common stock outstanding It also has 5,000 shares of preferred stock outstanding that pay a dividend of $15,000 per year Simon reports net i...

Figures for Simons diluted EPS Net income 290000 Interest net of ...

Garfun, Inc., owns all of the stock of Simon, Inc. For 2018, Garfun reports income (exclusive of

Question:

Garfun, Inc., owns all of the stock of Simon, Inc. For 2018, Garfun reports income (exclusive of any investment income) of $480,000. Garfun has 80,000 shares of outstanding. It also has 5,000 shares of preferred stock outstanding that pay a of $15,000 per year. Simon reports net income of $290,000 for the period with 80,000 shares of outstanding. Simon also has a liability for 10,000 of $100 bonds that pay annual interest of $8 per bond. Each of these bonds can be converted into three shares of common stock. Garfun owns none of these bonds.
Assume a tax rate of 30 percent. What amount should Garfun report as diluted earnings per share?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...