Question
During all of Year 4, our company had 200,000 common shares outstanding. During all of Year 4, there were 30,000 outstanding call options to buy
During all of Year 4, our company had 200,000 common shares outstanding.
During all of Year 4, there were 30,000 outstanding call options to buy common shares at $40 a share; and there were 20,000, $7, no par value, cumulative and convertible preferred shares outstanding. Each preferred share is convertible into three common shares.
During all of Year 4, we had outstanding $2,000,000 of 8% convertible bonds issued at face value. Each $1,000 bond is convertible into 20 common shares.
Year 4 net income was $750,000.
Instructions
Calculate basic and diluted earnings per share for Year 4. Prepare a schedule like we did in class and show all calculations for possible part marks.
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