At January 1, 2011, Canaday Corporation had outstanding the following securities: 600 million common shares 20 million

Question:

At January 1, 2011, Canaday Corporation had outstanding the following securities:

600 million common shares

20 million 6% cumulative preferred shares, $50 par

8% convertible bonds, $2,000 million face amount, convertible into 80 million common shares

The following additional information is available:

• On September 1, 2011, Canaday sold 72 million additional shares of common stock.

• Incentive stock options to purchase 60 million shares of common stock after July 1, 2010, at $12 per share were outstanding at the beginning and end of 2011. The average market price of Canaday's common stock was $18 per share during 2011.

• Canaday's net income for the year ended December 31, 2011, was $1,476 million. The effective income tax rate was 40%.


Required:

1. Calculate basic earnings per common share for the year ended December 31, 2011.

2. Calculate the diluted earnings per common share for the year ended December 31, 2011.


Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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