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Question 2 (10 marks) DBT Inc. had net income for the fiscal year ended June 30, 2021, of $4,800,000. The tax rate was 30%. There
Question 2 (10 marks)
DBT Inc. had net income for the fiscal year ended June 30, 2021, of $4,800,000. The tax rate was 30%. There were 400,000 common shares outstanding throughout 2021
DBT Inc. had the following outstanding during 2021:
- Options to buy 160,000 common shares at $40 per share. Market price of the shares was $60.
- 5% bonds non-convertible bonds with a principal amount of $28,000,000 issued at par.
- 4% convertible bonds with a principal amount of $36,000,000, issued at par. Each $1,000 bond is convertible into 50 common shares.
- 220,000 convertible preferred shares entitled to a cumulative dividend of $8 per share. Each preferred share is convertible into 2.5 common shares.
Required:
- Calculate basic earnings per share for Fiscal 2021.
- Calculate diluted earnings per share for Fiscal 2021.
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