Basic / Diluted EPS
Not what you're looking for?
Assume that the following data relate to Bear Creek, Inc. for the year 2004:
(TCO A)
Net income (30% tax rate) $3,200,000
Average common shares outstanding 2004 1,000,000 shares
10% cumulative convertible preferred stock:
Convertible into 80,000 shares of common $1,600,000
8% convertible bonds; convertible into 75,000
shares of common $2,500,000
Stock options:
Exercisable at the option price of $25 per share;
average market price in 2004, $30 90,000
Instructions:
(a) Compute the basic earnings per share for 2004. (Round to the nearest penny.)
(b) Compute the diluted earnings per share for 2004. (Round to the nearest penny.)
Purchase this Solution
Solution Summary
The solution explains how to calculate the basic and diluted earnings per share
Solution Preview
(a) Compute the basic earnings per share for 2004. (Round to the nearest penny.)
Basic earnings per share = (Net Income - Preferred dividends)/Number of common shares
Net Income = 3,200,000
Preferred dividends = 1,600,000X10%=$160,000
Number of common shares = 1,000,000
Basic earnings per share = (3,200,000-160,000)/1,000,000 = $3.04
(b) Compute the diluted earnings per share for ...
Purchase this Solution
Free BrainMass Quizzes
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Lean your Process
This quiz will help you understand the basic concepts of Lean.