What is the diluted earnings per share for gray company

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Gray Company has 150,000 ordinary shares outstanding, 10,000 cumulative convertible preference share with a par value of P100 per share that are convertible into 25,000 ordinary shares and an 8% convertible bonds with a face value of P1,000,000 which is equal to its liability component, convertible into 30,000 ordinary shares. Net income for the year is P850,000. Income tax rate is 32%.

Problem 1: Assuming the dividend rate of the preference share is 12%, what is the diluted earnings per share?

a. 4.36            c. 4.80
b. 4.41            d. 4.86

Problem 2: Assuming the dividend rate of the preference share is 10%, what is the diluted earnings per share?

a. 4.36          c. 4.80
b. 4.41          d. 4.86

Reference no: EM132745400

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