Francine Limited was incorporated with a share capital consisting of 100,000 common shares. In January 2011, it

Question:

Francine Limited was incorporated with a share capital consisting of 100,000 common shares. In January 2011, it issued 20,000 mandatorily convertible preferred shares. The terms of the prospectus for the issuance of the pre ferred shares require that these convertible preferred shares have to be converted into common shares, at the rate of one preferred share for one common share, during the fourth quarter of 2012. The preferred shares pay an annual of $4 per share. Assume that for the fiscal year ended December 31, 2011, the company made an after-tax profit of $140,000.
Calculate the 2011 earnings per share. Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...