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At December 31, 2010, Risk Company had 500,000 shares of common stock outstanding. Risk sold 50,000 shares on October 1, 2011. Net income for 2011

  1. At December 31, 2010, Risk Company had 500,000 shares of common stock outstanding. Risk sold 50,000 shares on October 1, 2011. Net income for 2011 was $2,417,875. The tax rate was 30%. In addition, Risk had the following debt and equity securities on its books on December 31, 2011:
  • 18,000 shares of $100 par, 12% cumulative preferred stock
  • 28,000 shares of $100 par, 10% cumulative preferred stock, par $100, sold at 110. Each share of preferred stock is convertible into 2 shares of common stock.
  • $2,000,000 face value of 9% bonds sold at par
  • $3,000,000 face value of 70% convertible bonds sold to yield 8%. Unamortized bond discount is $100,000 at December 31, 2011. Each $1,000 bond is convertible into 20 shares of common stock.

Options to purchase 10,000 shares of common stock were issued on May 1, 2011.

Exercise price is $30 per share. Market value at the date of option was $29. Average market value from May 1 to December 31, 2011, was $40.

Compute the earnings per share amounts for the year ended December 31, 2011.

Calculate the weighted average number of shares for the following

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