Information concerning the capital structure of Bedrock Mining, Inc. is as follows:
Common stock shares shares
Convertible preferred stock shares shares
$ par, convertible bonds $ $
During Bedrock Mining paid dividends of $ per share on its common stock and $ per share on its preferred stock. The preferred stock is convertible into shares of common stock. The convertible bonds are convertible into shares of common stock. The net income for the year ended December was $ and the companys income tax rate was
Required:
What was basic EPS, rounded to the nearest penny?
What was diluted EPS, rounded to the nearest penny?
SOLUTION:
Basic EPS Diluted EPS
Common shares outstanding
Conversion of bonds
Conversion of preferred stock
Number of shares used in EPS computation
Net income as reported
Aftertax interest on the bonds $ x $
Preferred dividends $ x shares
Earnings used in EPS computation
Earnings per share
