Calculate the diluted earnings per share

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Question - ABC Limited had net income for the fiscal year ending December 31, 2020, of $15.4 million. There were 2 million common shares outstanding throughout 2020. The average market price of the common

ABC had the following potential common shares outstanding during 2020:

Options to buy 100,000 common shares at $60 per share

800,000 convertible preferred shares entitled to a cumulative dividend of $9 per share. Each preferred share is convertible into two common shares.

6% convertible debentures with a principal amount of $100 million, issued at par. Each $1,000 debenture is convertible into 20 common shares.

Required -

1. Calculate the basic earnings per share.

2. Calculate the Diluted earnings per share.

Reference no: EM133131657

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