Newell Corporation's long-term capital structure consists of the following at the end of the current fiscal year on November 30, 19x5.

- P10,000,000 of 8% convertible bonds

- 100,000 shares of P5 par value common stock

- 40,000 shares of P100 par value, 6% cumulative preferred stock.

All of these securities have been outstanding for the entire 19x5 fiscal year. The bonds are potential common shares and each P1,000 bond is convertible into 10 shares of common stock. Dividends on the preferred stock are current as of November 30, 19x5. Newell Corporation is subject to an effective income tax rate of 40%. Newell's reported net income is P1,840,000 for the year ended November 30, 19x5.

The basic earnings per share of common stock that would be reported on Newell Corporation's income statement for the year ended November 30, 19x5, is: (SHOW SOLUTION)

a. P18.40

b. P16.00

c. P12.00

d. P11.60

The diluted earnings per share of common stock that would be reported on Newell Corporation's income statement for the year ended November 30, 19x5, is: (SHOW SOLUTION)

a. P12.00

b. P11.60

c. P10.40

d. P 9.60