Reference no: EM132833747

In 2021 Our Company had Net Income of $825,000. On 1/1/21, there were 250,000 shares of common stock outstanding. On 4/1/21, we issued 54,000 shares of common stock. On 6/1/21, we issued 36,000 shares of $100 par value, 6% cumulative preferred stock. This preferred stock is convertible into 72,000 shares of common stock. On 9/1/21, we issued $9,000,000 of 4% bonds at par. These bonds are convertible into 60,000 shares of common stock. The marginal tax rate is 30%.In addition, there are 130,000 options outstanding at 12/31/21. Each option entitles the holder to exchange it for 1 share of common stock at an exercise price of $22 per share. The average market price for common stock for 2021 was $60. Be sure to show your calculations.

Required:

Problem 1: How much is Basic Earnings Per Share?

Problem 1: How much is Diluted Earnings Per Share?