$3$

$.$

$$Dulcinea Corporation had $

$1$

$,$

$2$

$5$

$0$

$,$

$0$

$0$

$0$

$$of net income in

$2$

$0$

$2$

$3$

$.$

$$ On January

$1$

$,$

$2$

$0$

$2$

$3$

$,$

$$there were

$2$

$3$

$5$

$,$

$0$

$0$

$0$

$$shares of common stock outstanding. On April

$1$

$,$

$$there were

$1$

$0$

$,$

$0$

$0$

$0$

$$additional shares issued. On July

$1$

$,$

$$Dulcinea issued a

$1$

$0$

$\%$

$$stock dividend and on September

$1$

$,$

$$Dulcinea bought

$1$

$5$

$,$

$0$

$0$

$0$

$$shares of treasury stock.

The market price of the common stock averaged $

$2$

$7$

$$during

$2$

$0$

$2$

$2$

$.$

$$ The tax rate is

$2$

$5$

$\%$

$.$

During

$2$

$0$

$2$

$3$

$,$

$$there were

$1$

$0$

$,$

$0$

$0$

$0$

$$shares of cumulative, convertible preferred stock outstanding. The preferred is $

$1$

$0$

$0$

$$par$,$ pays $

$4$

$$per share in dividends per year and each share of preferred stock is convertible into two shares of common stock.

Dulcinea issued $

$4$

$,$

$0$

$0$

$0$

$,$

$0$

$0$

$0$

$$of

$5$

$\%$

$$convertible bonds at face value ten years earlier. All bonds remained outstanding throughout

$2$

$0$

$2$

$3$

$.$

$$ Each $

$1$

$,$

$0$

$0$

$0$

$$bond is convertible into

$1$

$0$

$$shares of common stock.

Required:

a

$.$

$$Calculate the weighted average number of shares outstanding for

$2$

$0$

$2$

$3$

$$to be used to calculate basic earnings per share.

b

$.$

$$Compute basic earnings per share.

c

$.$

$$Calculate the number of shares to be used to calculate diluted earnings per shares.

d

$.$

$$Compute diluted earnings per share.