Reference no: EM132602041

Question - Costmo Ltd. Capital structure as at January 1, 2008 $60 Million, 15 year convertible debenture issued at interest at 3% per annum payable annually 31st December each $2000 debenture convertible into 60 common shares 60,000,000 Series T preferred no par value $2.50 cumulative non participating $600,000 shares issued and outstanding each share convertible into four commonshares 1,200,000 Common , no par value 6,000,000 shares issued and outstanding 2,800,000 824,000 stock options entitiling option holders to purchase 1 common shares for each 2 options held at $2 per share, options exercisable beginning Jan 1 2015 400,000 Retained Earnings. 47,2000,000

Additional information:

GAAP after tax 2008 Net Income $8,220,000

Income Tax Rate for 2008: 40%

The average common share price in 2008 was $8.00.

The following additional information is available from the company's 2008 records.

All convertible debentures, series T preferred shares an stock options remain outstanding in the financial statements as of December 31, 2008.

Basic Earnings per share fo the year ended December 31, 2008 has been determined at $.80 (Net Income available to common shareholders $6,720,000; Weighted average common shares 8,400,000)

Requirement - Calculate Costmo Ltd diluted EPS for the year ended December 31, 2008. Provide detailed support of all relevant calculation.