Calculate the basic earnings per share

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1) Cyber Corporation has just issued their 2017 annual report. They have 700,000 common shares outstanding. Each selling for $84 in the market. Moreover, there are 100,000 shares preferred stocks outstanding. Preferred stocks have $10 par value and 8% dividends. Each preferred stock can be converted into 2 common stocks. Also there are 100,000 options each to purchase one common share at $80 per share. None of these options have been exercised yet. Cyber Corporation announced net income of $1,200,000 and distributed preferred dividends of $80,000 at the end of 2017.

a) Calculate the basic earnings per share.

b) Calculate the diluted earnings per share.

Diluted EPS=Basic EPS-EPS impact of dilutive options and warrants-EPS impact of dilutive convertibles

Reference no: EM132505894

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