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What is basic earnings per share

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Reference no: EM133003663

Question - The following information relates to Dover Inc.'s earnings per share computations for 2021:

Net income $ 825,000

6% cumulative nonconvertible preferred stock, $100 par, 10,000 shares outstanding during all of 2021 $1,000,000

Income tax rate 21%

Weighted average of common shares outstanding 600,000

Dover issued $4,800,000 face amount convertible bonds during 2018. Each $1,000 bond is convertible into 50 shares of Dover's common stock starting in 2024. For the year ended December 31, 2021, interest expense of $300,000 on the bonds was reported on Dover's income statement.

At December 31, 2020, there were no dividend arrearages on the preferred stock.

For the year ended December 31, 2021, what is basic earnings per share?

A. $1.375.

B. $1.225.

C. $1.275.

D. $1.338.

Reference no: EM133003663

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