For Parent and Subsidiary

Subsidiary $51,000 20,000 (15,000 = 75% owned by parent) Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: Parent Net income $230,000 Common shares outstanding 50,000 Convertible preferred stock Dividends - $22,400 Convertible into 9,000 shares of common stock Convertible bonds a. Compute basic earnings per share $ 4.6 b. Compute diluted earnings per share $ 5.36 Interest expense after tax $5,400Convertible into 4,000 shares of common stock Check