Find what is the diluted earnings per share

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Information concerning the capital structure of Shepherd Corporation follows:

December 31,                                                                     2019                             2018

Common shares outstanding                                 100,000 shares               100,000 shares

Convertible preferred shares outstanding                  10,000 shares                10,000 shares

9% convertible bonds                                               $2,000,000                     $2,000,000

Question 1: During 2019, Shepherd paid dividends of $1.00 per common share and $2.50 per preferred share. The preferred shares are non-cumulative, and convertible into 20,000 common shares. The 9% convertible bonds are convertible into 50,000 common shares. Net income for calendar 2019 was $500,000. Assume the income tax rate is 30%. What is the diluted earnings per share for 2019?

Reference no: EM132494484

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