Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports income (exclusive

Question:

Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports income (exclusive of any investment income) of $600,000. Primus has 100,000 shares of outstanding. Sonston reports net income of $200,000 for the period with 40,000 shares of outstanding. Sonston also has 10,000 stock warrants outstanding that allow the holder to acquire shares at $10 per share. The value of this stock was $20 per share throughout the year. Primus owns 2,000 of these warrants. What amount should Primus report for 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...