Compute basic and diluted earnings per share for the year

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Reference no: EM133360024

At December 31, 2021, the financial statements of Cavanni Casting Corporation included the following:
Net income for 2021 $500 million
Common stock, $1 par:
Shares outstanding on January 1 150 million shares
Shares retired for cash on February 1 24 million shares
Shares sold for cash on September 1 18 million shares
2-for-1 split on July 23
Preferred stock, 10%, $70 par, cumulative, nonconvertible $ 70 million
Preferred stock, 8%, $50 par, cumulative, convertible into 4 million shares of common stock $100 million
Incentive stock options outstanding, fully vested, for 4 million shares of common stock; the exercise price is $15
Bonds payable, 10%, convertible into 20 million shares of common stock $200 million

Additional data:

The market price of the common stock averaged $20 during 2021.

The convertible preferred stock and the bonds payable had been issued at par in 2019. The tax rate for the year was 25%.

Required: Compute basic and diluted earnings per share for the year ended December 31, 2021 (round to two decimal places).

Reference no: EM133360024

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