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    diluted EPS

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    Basic and Diluted Earnings Per Share
    Assume that the following data relate to Bass, Inc. for the year 2004:

    Net income (30% tax rate) $3,100,000
    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 shares


    (14) basic earnings per share, and

    (15) diluted earnings per share.

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    Solution Preview

    Primary EPS is calculated using the number of shares that have been issued and held by investors. These are ...

    Solution Summary

    This provides the steps to calculate the diluted EPS.