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(d) Assume the preference shares issued during the year is convertible to 50,000 ordinary shares, how does it affect the diluted earnings per share for
(d) Assume the preference shares issued during the year is convertible to 50,000 ordinary shares, how does it affect the diluted earnings per share for 2019?
James Company had $1,644,500 net income in 2019. On 1 January 2019, there were 500,000 ordinary shares outstanding. During the year, the company has recorded the following transactions: 1 April : issued 20,000 ordinary shares 1 May : 2-for-1 share splits 1 July: issued 100,000 5% noncumulative and nonconvertible preference shares 1 October: repurchased 15,000 treasure shares at $35 James issued $1,000,000 of 9% convertible bonds at face value during 2018. Each $1,000 bond is convertible into 50 ordinary shares. Top executives were granted 20,000 options to buy ordinary shares at $40 if the net income is over $900,000. The beginning and ending market price of the ordinary shares was $48 and $52 respectively during the year 2019. At the financial year-end, the company declared and paid $5 cash dividends to all ordinary shareholders and the relevant corporate tax rate was 40%Step by Step Solution
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