Montgomery Corporation has 6% convertible preferred stock outstanding. It declared preferred dividends of $4,800 during the year.

Question:

Montgomery has 6% convertible preferred stock outstanding. It declared preferred dividends of $4,800 during the year. The preferred shares are convertible into 2,000 shares of common stock. Compute the impact of these convertible preferred shares on Montgomery Corporation’s diluted earnings per share.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...