11. At December 31, 2017, Sager Co. had 1,200,000 shares of common stock outstanding In addition, Sager had 450,000 shares of preferred stock which were convertible into 750,000 shares of common stock. During 2018, Sager paid $1.200,000 cash dividends on the common stock and $800,000 cash dividends on the preferred stock. Net income for 2018 was $6,800,000 and the income tax rate was 40%. The diluted earnings per share for 2018 is (rounded to the nearest penny) A) $2.48. B) $349. C) $5.00. D) S5.66. 12. A corporation issues bonds with detachable warrants. The amount to be recorded as paid-in capital is preferably A) zero. B) calculated by the excess of the proceeds over the face amount of the bonds. C) equal to the market value of the warrants. D) based on the relative market values of the two securities involved 13. Compensation expense resulting from a compensatory stock option plan is generally A) B) C) D) recognized in the period of exercise. recognized in the period of the grant. allocated to the periods benefited by the employee's required service. allocated over the periods of the employee's service life to retirement. 14. The conversion of preferred stock is recorded by the A) B) C) D) incremental method. book value method. market value method. par value method. 15. A company uses income from continuing operations to determine whether potential common stock is dilutive or antidilutive, and this is referred to as A) the control number. B) the potential number. C) dilutive information. D) impact information