D. D & H Inc. has 10,000,000 shares of $1 par value common stock outstanding at January 1. On April 1, D & H issued 1,000,000 shares at a cost of $30 per share. In addition, at December 31, 2018, 450,000 shares were issuable upon exercise of executive stock options which an exercise price of $20 per share. The average market price of the companys stock was $30 per share. Dun & Harvey Inc. also has two convertible securities.

a. Convertible bonds, $5,000,000 face value, 6% interest, convertible into 200,000 shares of common stock.

b. 20,000 shares of $100 par value convertible preferred stock with a dividend rate of 4.5%. Each $100 par value share is convertible into 8 shares each.

During 2018, D & Hs net income was $20,700,000 and all preferred stock dividends were declared and paid. The companys tax rate is 20%.

Instructions

Compute the diluted earnings per share for 2018.