FRM Corporation

Year Ended December X

Longterm debt:

first mortgage bonds, due July X $

unsecured debentures issued at par, due July X convertible into Class A common shares at $ at any time prior to maturity $

unsecured debentures issued at par, due April X convertible into Class A common shares on or after December X $

Share Capital:

Preferred shares, dividend rate of $ per share, cumulative and nonparticipating, convertible to Class B common shares at the rate of two shares of Class B for each share of preferred shares

Class A common shares, one vote per share shares

Class B common shares, votes per share, sharing dividends equally with Class A common shares shares

Options:

employee stock options issued on December X each exchangeable for one Class A share as follows:

$ per share prior to January X

$ per share between January X and December X

$ per share between January X and December X

The options expire at the close of business on December X

employee stock options issued on December X each exchangeable for one Class A share at a price of $ per share prior to December X The options expire at the close of business on December X

Contingent shares:

FRM entered into a contingent share agreement in X when it acquired another company. FRM must issue Class A shares in March of X if the acquired company\'s core operations earn $ before tax each year from the acquisition date through X To date, earnings have surpassed this level.

Additional Information:

Aftertax earnings for the year ended December X were $ this was after a $ aftertax gain from discontinued operations.

The income tax rate was

The average market value of the common shares during the period was $

Dividends were paid quarterly on preferred shares; there are no dividends in arrears.

Dividends of $ per quarter were declared on both Class A and Class B shares; the dividends were payable to shareholders of record at the end of each calendar quarter and were paid five business days thereafter.

On October X debentures with a principal amount of $ were converted into Class A shares included in the outstanding shares listed above At the beginning of the year, the total principal amount of the debentures was $

On May X FRM issued $ face value of unsecured debentures, due April X convertible into Class A common shares on or after December X The bonds were issued for $ and $ of the proceeds was classified in equity as the value of the conversion option.

Required:

a Calculate basic earnings per share.

b Calculate diluted earnings per share.