Determine an incremental per share effect

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Question - Crane Corporation is preparing earnings per share data for 2020. The net income for the year ended December 31, 2020 was $410,000 and there were 58,500 common shares outstanding during the entire year. Crane has the following two convertible securities outstanding:

10% convertible bonds (each $1,000 bond is convertible into 20 common shares) $114,0004% convertible $100 par value preferred shares (each share is convertible into 2 common shares) $55,000

Both convertible securities were issued at face value in 2017. There were no conversions during 2020, and Crane's income tax rate is 23%. The preferred shares are cumulative. For simplicity, ignore the requirement to record the debt and equity components of the bonds separately.

A) Determine an incremental per share effect for the 14% preferred shares.

B) Calculate Crane's dilutive earnings per share for 2020.

Reference no: EM133005895

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