Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Compute diluted earnings per share for 2012. Please show work Morgan Corporation had 400,000 shares of $1 par value common stock outstanding at January 1,
Compute diluted earnings per share for 2012. Please show work
Morgan Corporation had 400,000 shares of $1 par value common stock outstanding at January 1, 2012. On July 1, 2012, the company issued 100,000 additional shares of common stock. In addition, at December 31, 2012, 90,000 shares were issuable upon exercise of executive stock options which require a $50 cash payment upon exercise. The average market price during 2012 was $50. Morgan Corporation also has two convertible securities. There are 2,000 convertible bonds with a face amount of $1,000, interest rate of 6% and convertible into 20 shares of common stock and 20,000 shares of 5%, $60 par value convertible into 2 shares each. During 2012, Morgan Corporation's net income was $2,200,000 and all preferred stock dividends were declared and paid. The company's tax rate is 40%. Compute the diluted earnings per share for 2012. (Please show work)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started