Reference no: EM132921659

Problem - The following information pertains to Excelsior, Inc.:

1. Net income for the year 2020 equals $570,000.

2. Since the beginning of the year, $400,000 of 8% convertible bonds (issued at par) were outstanding. Each of the 400, $1,000 bonds can be converted into 20 shares of common stock for the next 10 years. None of these bonds were converted during the year.

3. Since the beginning of the year, stock warrants were outstanding to buy 15,000 shares of common stock at $10 per share. None of these warrants were exercised during the year.

4. At the beginning of the year, 100,000 shares of $5 par common stock were outstanding. During the year, Excelsior split its stock 3 for 1.

5. Feyenoord's income tax rate for the year is 30%. 6. The average market price for common stock during 2020 was $50.

Compute basic and diluted earnings per share for the year 2020.