Question
Assume that the following data relative to Metro Co. for 20x1 is available: Net Income (40% tax rate): $3,200,000 Transactions in common shares 1/1Beginning number1,000,000
Assume that the following data relative to Metro Co. for 20x1 is available:
Net Income (40% tax rate): $3,200,000
Transactions in common shares
1/1Beginning number1,000,000 shares
3/1Purchase of treasury shares(60,000)
6/1Stock split, 3 for 1
9% cumulative convertible preferred stock
Issued (in 20x0) at par ($1,000,000), convertible into 200,000 shares of common stock.
Stock options
No stock option was exercised in 20x1, but exercisable at the option price of $35 per share. If exercised, 60,000 common shares would be issued.
Average market price in 20x1 is $40.
Compute the basic and diluted EPS for 20x1.
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