Reference no: EM132835656

Question - Earnings Per Share - For each of the following independent cases, calculate either the Basic or Diluted EPS.

Place answers on the lines provided and show all work in the space above each answer.

A) Ryan Company had net income of $400,000 for the year and paid no dividends. Ryan began the year with 100,000 shares of common stock and issued 20,000 more shares on March 1. On June 1, Ryan issued a 50% stock dividend. On November 1, Ryan issued 30,000 more shares of common stock. Calculate the Basic EPS?

B) Orion Corporation had net income (after tax) of $2,000,000 and paid dividends of $25,000 to preferred stockholders. Orion had 100,000 shares of common stock issued and outstanding the entire year. Orion also had $1,500,000 of 10% convertible bonds. These bonds were convertible into 30,000 shares of common stock. Orion's tax rate is 40%. Calculate the Diluted EPS.

C) Zenith Corporation had net income of $280,000 and paid no dividends during the year. Zenith had 80,000 shares of common stock issued and outstanding the entire year. Zenith had 10,000 options exercisable into 10,000 shares of common stock at $10 per share. These options were outstanding the entire year. The average market price of Zenith's stock was $25. Calculate the Diluted EPS.