3.

In 2021 Our Company had Net Income of $825,000.

On 1/1/21, there were 250,000 shares of common stock outstanding.

On 4/1/21, we issued 54,000 shares of common stock.

On 6/1/21, we issued 36,000 shares of $100 par value, 6% cumulative preferred stock. This preferred stock is convertible into 72,000 shares of common stock.

On 9/1/21, we issued $9,000,000 of 4% bonds at par. These bonds are convertible into 60,000 shares of common stock. The marginal tax rate is 30%.

In addition, there are 130,000 options outstanding at 12/31/21. Each option entitles the holder to exchange it for 1 share of common stock at an exercise price of $22 per share.

The average market price for common stock for 2021 was $60.

Be sure to show your calculations!

Required:

Answer:

How much is Basic Earnings Per Share?

How much is Diluted Earnings Per Share?