Dilutive EPS Example. We did it in class but are unsure of how to find the highlighted value.

Dilutive EPS Examples Example 1 - Basic facts Net Income: $450,000 100,000 shares of $5 par, common shares outstanding all year 20,000 non-convertible, $50 par, 8% cumulative preferred shares outstanding all year Tax rate: 30% Calculate Basic EPS (450,000-80,000)/100,000= $3.70 Example 1 - Additional Facts - Scenario #1 Assume that the preferred stock was convertible to 1 share of common stock. The preferred stock was the only dilutive security in the capital structure. Calculate Diluted EPS (450,000-80,000+800,000)/(100,000+20,000)= $3.70