Reference no: EM132583903
The following data relate to XYZ Ltd. for the calendar year 2019:
Net income (30% tax rate)............................................................... $3,250,000
Average number of common shares
outstanding during 2019.............................................................. 1,200,000 shares
8%, cumulative convertible preferred shares:
convertible into 90,000 common shares................................... $1,800,000
6% convertible bonds; convertible into 60,000
common shares......................................................................... $2,000,000
Stock options, exercisable at $30 per share......................................... 105,000 shares
All the convertible securities and stock options were outstanding all year. The average market price of the common shares in 2019 was $35.
Instructions
Question 1: Calculate:
a. basic earnings per share
b. diluted earnings per share