Question
During year 5, black corp had 200,000 common shares outstanding for the full year. Black corp reported $800,000 net income for year 5. The tax
During year 5, black corp had 200,000 common shares outstanding for the full year. Black corp reported $800,000 net income for year 5. The tax rate is 40%.
Market prices of the common shares during year 5 were:
Jan 1: 77$
Year average: 80$
December 31: 82$
During year 5 there were:
-40,000 outstanding stock options to buy common shares at 40$ a share
-$2,000,000 of 8% convertible bonds issued at par. Each $1,000 bond is convertible into 20 common shares
-20,000 preferred shares each paying a $7 dividend and each convertible to three common shares
Calculate basic and diluted earnings per share for year 5.
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