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Assume the following facts are about a parent and its 70% owned subsidiary company: What is the diluted earnings per share? DETAIL CALCULATION Parent Subsidiary
Assume the following facts are about a parent and its 70% owned subsidiary company:
What is the diluted earnings per share? DETAIL CALCULATION
|
| Parent | Subsidiary |
| Net income | $100,000 | $60,000 |
| Common shares outstanding | 20,000 |
14,000 (20,000 = 70% owned by parent) |
| Convertible Preferred Stock | Dividends = $10,000 Convertible into 5,000 shares of common stock |
|
| Convertible Bonds |
|
Interest expense after tax = $8,000 Convertible into 2,500 shares of common stock
|
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