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Calculate the diluted earnings per share

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Reference no: EM132590820

Question - The following data relate to NWT Ltd. for the calendar year 2019:

Net income $4,500,000

Weighted average number of common shares outstanding during 2019 1,000,000 shares

10%, cumulative convertible preferred shares: convertible into 80,000 common shares $1,600,000

8% convertible bonds; convertible into 75,000 common shares $2,500,000

Call options on common shares, exercisable at $25 per share 90,000 shares

All the convertible securities and stock options were outstanding all year. The average market price of the common shares in 2019 was $30. NWT's tax rate is 26%.

Instructions - Calculate the followings. Round your answer to two decimal points and show all calculation.

a. Basic earnings per share

b. Diluted earnings per share with stock option exercised.

c. Diluted earnings per share with stock option exercised and convertible preferred share.

d. Diluted earnings per share with stock option exercised, convertible preferred share and convertible bonds.

Reference no: EM132590820

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