Question
Giovanni Corp. had $1,000,000 net income in 2021. On January 1, 2021 there were 200,000 shares of common stock outstanding. There are 30,000 options to
Giovanni Corp. had $1,000,000 net income in 2021. On January 1, 2021 there were 200,000 shares of common stock outstanding. There are 30,000 options to buy common stock at $40 a share outstanding. The market price of the common stock averaged $50 during 2021. The tax rate is 30%.
During 2021, there were 40,000 shares of preferred stock outstanding. The preferred is $100 par, pays $3.50 a year dividend.
Giovanni issued $2,000,000 of 8% convertible bonds at face value during 2020. Each $1,000 bond is convertible into 30 shares of common stock.
Prepare the Basic and Diluted Earnings per Share for Giovanni Corp. for FY2021.
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