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Computing consolidated earnings per share (EPS)
Assume the following facts about a parent and its 80% owned subsidiary company:
| parent | Subsidiary |
| Net Income $200,000 Common shares outstanding 40,000 Convertible preferred stock Dividends=$20,000 Convertible into 10,000 shares of common stock Convertible bonds | $50,000 20,000(16,000=80% owned by parent) Interest expense after tax=$8,000 convertible into 5,000 shares of common stock |
Compute basic earnings per share
Compute diluted earnings per share
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