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Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company Parent Subsidiary Net income.................................................... $180,000 $45,000

Computing consolidated earnings per share (EPS)

Assume the following facts about a parent and its 75% owned subsidiary company

Parent Subsidiary

Net income.................................................... $180,000 $45,000

Common shares outstanding................ 50,000 22,000 (16500=75%

owned by parent)

Convertible preferred stock................... Dividends=$17100

convertible into 9000

shares of common stock

convertible bonds....................................... interest expense ........................................................................ tax= $7,200

convertible into

4500 shares of

common stock

Question: Compute diluted earnings per share

I already computed basic earnings per share and got $11.91 per share

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