Reference no: EM132745380
Information relating to the capital structure of the Magdalene Corporation at December 31, 2012 is as follows:
Ordinary share capital 120,000 shares
Convertible preference share capital, non-cumulative 18,000 shares
7.5% convertible bonds (liability component) P1,200,000
Stock options to purchase 20,000 shares at an option price of P15. The average market price on December 31, 2012 is P20.
Problem 1: The company paid dividends of P5 per share on its preference share. The preference share is convertible into 40,000 shares of ordinary share. The 7.5% convertible bonds are convertible into 35,000 shares of ordinary. The net income for the year ended December 31, 2012 is P640,000. Income tax rate is 32%. What is the diluted earnings per share for the year 2012?
a. 3.51 c. 4.25
b. 3.60 d. 4.58
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