Earnings per share

Common stock: shares outstanding

Balance on January 1st: 500,000

April 1- issued in conversion of preffered stock: 200,000

July 1- sold for cash: 100,000

Balance on December 31: 800,000

Preferred stock: shares outstanding

$10 par 8% each convertible into two common shares

Shares outstanding, January 1: 175,000

converted April 1 (into 200,000 common): 100,000

Shares outstanding at year end: 75,000

Options

100,000 options each to purchase one common share at $80 per share. None have been exercized.

Additional Information:

Market prices of common stock for the year: avg for end of year- $84. end of year- $86

preferred dividends paid in year: avg for end of year- $80,000

net income: avg for end of year- $1,200,000

A. compute weighted average of number of common shares outstanding for the year

B. compute basis eps

C. compute diluted eps

Clearly indicate by highlighting the changes you made. Discuss how the Diluted EPS changed after the changes were made.

The following in t he Cape C ockrestanding Aprili Balance on Dober 31 SIoachines Comented on April 200.000 ) Share outstanding at yowed 75.000 de y Marloesow Pored divided in Ange for 584 S. Sheralding N 500,000 a May May ! S1.200000 Dividends percorrodstock Income vide for shares SL1200 Net new wall for C hr Weighted Aver s ari . 200.000 CS 175.000 peel 75.000 350.000 150.000 1.350.000 Oi Amed Total share available for Proceeds 100,000 58 Average market price Incremental Weighted w e share 0.000 200.000 b ed Earnings Adatod New Weighted Average Come and Police S tanding 1.121.000-14 904,762 The following in t he Cape C ockrestanding Aprili Balance on Dober 31 SIoachines Comented on April 200.000 ) Share outstanding at yowed 75.000 de y Marloesow Pored divided in Ange for 584 S. Sheralding N 500,000 a May May ! S1.200000 Dividends percorrodstock Income vide for shares SL1200 Net new wall for C hr Weighted Aver s ari . 200.000 CS 175.000 peel 75.000 350.000 150.000 1.350.000 Oi Amed Total share available for Proceeds 100,000 58 Average market price Incremental Weighted w e share 0.000 200.000 b ed Earnings Adatod New Weighted Average Come and Police S tanding 1.121.000-14 904,762