Illustrate what should be diluted earnings per share

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Reference no: EM13131072

At December 31, 2000, Rand Company had 2,000,000 shares of common stock outstanding. On January 1, 2001, Rand issued 500,000 shares of preferred stock which were convertible into 1,000,000 shares of common stock. During 2001, Rand declared and paid $900,000 cash dividends on the common stock and $300,000 cash dividends on the preferred stock. Net income for the year ended December 31, 2001, was $3,000,000. Assuming an income tax rate of 30%, what should be diluted earnings per share for the year ended December 31, 2001? (Round to the nearest penny.)

Reference no: EM13131072

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