BUS 203 - Review Chapter 16 Earnings per Share Handout Delta Digital Inc. has just closed its books for 2019. The company follows GAAP when preparing its financial statements and earing per share data. The CFO of Delta is aware of the importance of earnings per share and has requested that you review the financial data below and prepare both Basic and Diluted Earnings per share for review with Delta's CEO next week. The following relevant financial information for 2019 is provided: Net Income Convertible Bonds, 7% Preferred Cumulative Stock, 6%, $100 par Common Stock, $10 par Corporate Tax Rate Average Common Stock Market Price/share $5,700,000 2,000,000 4,000,000 6,000,000 20% $25 There were no changes to common stock during the year, i.e. no new shares were issued or acquired. There are no Preferred Stock dividends in arrears as of 12/31/19 The convertible bonds allow holders to covert each 1,000 bond into 30 shares of common stock. Additionally. Delta has 75,000 common stock options outstanding, granting option holders the right to purchase stock at $20 per share. Required 1. Compute Basic Earnings per share 2. Compute Diluted Earnings per share (round to the nearest cent)