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1. Earnings Per Share Calculations (20 points) Kkanbu, Inc. had the following securities outstanding and other information for 2020: Preferred Stock: Issue A Preferred Stock, cumulative and nonconvertible, $1,000 par: $ 1,000,000 The quarterly dividend per share is $6. Dividend payments are in arrears for three (3) years. Issued in 2012. Issue B Preferred Stock, non-cumulative and convertible, 1.25%, $100 par $ 800,000 Conversion rate is 30 common shares for every preferred share. Issued in 2017. $ 900,000 Common Stock: Class A Common Stock, $1 par, 3,000,000 shares authorized, 900,000 shares issued and outstanding at January 1, 2020 Issued 70,000 shares on April 1, 2020 Repurchased 65,000 shares on May 1, 2020 Repurchased 45,000 shares on August 1, 2020 Issued 175,000 shares on October 1, 2020 upon the conversion of Convertible Bonds noted below Stock Warrants - warrants are exchangeable for 130,000 common shares. The warrants were issued on July 1, 2020 and have a $21 exercise price per warrant. Stock Options - Kkanbu's issued 75,000 stock options to key executives on January 1, 2018 which vest on December 31, 2021 and have an exercise price of $18 per option. Convertible Bonds - 2.5% Convertible Bonds of $3,000,000 were sold at par value in 2016. Each $1,000 of bond is convertible into 50 shares of common stock. The entire $3,000,000 bond issue was converted on October 1, 2020. Other Information: Net Income for 2020 was $1,250,000 Income Tax Rate was 18% for 2020 Kkanbu's declared and paid a cash dividend of $50,000 on common stock during 2020. The average market price per common share for the second half and all of 2020 was $27. Required - Calculate Kkanbu's Basic and Diluted EPS for the year ended December 31, 2020, show all calculations. 1. Earnings Per Share Calculations (20 points) Kkanbu, Inc. had the following securities outstanding and other information for 2020: Preferred Stock: Issue A Preferred Stock, cumulative and nonconvertible, $1,000 par: $ 1,000,000 The quarterly dividend per share is $6. Dividend payments are in arrears for three (3) years. Issued in 2012. Issue B Preferred Stock, non-cumulative and convertible, 1.25%, $100 par $ 800,000 Conversion rate is 30 common shares for every preferred share. Issued in 2017. $ 900,000 Common Stock: Class A Common Stock, $1 par, 3,000,000 shares authorized, 900,000 shares issued and outstanding at January 1, 2020 Issued 70,000 shares on April 1, 2020 Repurchased 65,000 shares on May 1, 2020 Repurchased 45,000 shares on August 1, 2020 Issued 175,000 shares on October 1, 2020 upon the conversion of Convertible Bonds noted below Stock Warrants - warrants are exchangeable for 130,000 common shares. The warrants were issued on July 1, 2020 and have a $21 exercise price per warrant. Stock Options - Kkanbu's issued 75,000 stock options to key executives on January 1, 2018 which vest on December 31, 2021 and have an exercise price of $18 per option. Convertible Bonds - 2.5% Convertible Bonds of $3,000,000 were sold at par value in 2016. Each $1,000 of bond is convertible into 50 shares of common stock. The entire $3,000,000 bond issue was converted on October 1, 2020. Other Information: Net Income for 2020 was $1,250,000 Income Tax Rate was 18% for 2020 Kkanbu's declared and paid a cash dividend of $50,000 on common stock during 2020. The average market price per common share for the second half and all of 2020 was $27. Required - Calculate Kkanbu's Basic and Diluted EPS for the year ended December 31, 2020, show all calculations

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