Reference no: EM132980692

Question: Wildhorse Corporation had net income of $54,100 for the year ended December 31, 2020, and a weighted average number of common shares outstanding of 14,000. The following information is provided regarding the capital structure:

1. 5% convertible debt, 220 bonds each convertible into 42 common shares. The bonds were outstanding for the entire year. The income tax rate is 45%. The bonds were issued at par ($1,000 per bond). No bonds were converted during the year.

2. 4% convertible, cumulative $100 preferred shares, 1,000 shares issued and outstanding. Each preferred share is convertible into 3 common shares. The preferred shares were issued at par and were outstanding the entire year. No shares were converted during the year.

Calculate the income effect of the dividends on preferred shares.

Calculate the basic earnings per share for 2020. (Round answer to 2 decimal places, e.g. 15.25.)