Question: I m stuck on this question. Could you please help me? Bella Luna Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred

I m stuck on this question. Could you please help me?

Bella Luna Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 7.5% convertible bonds outstanding during 2019. The preferred stock is convertible into 40,000 shares of common stock. During 2019, Bella Luna paid dividends of $0.90 per share on the common stock and $3 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2019 was $600,000 and the income tax rate was 30%.

- What is the basic earnings per share for 2019?

a) $2.20

b) $2.42

c) $2.51

d) $2.70

- What is Diluted earnings per share for 2019?

a) $2.08

b) $2.11

c) $2.29

d) $2.50

- Which one of the following does not require the computation of diluted earnings per share?

a) convertible bonds

b) stock warrants

c) preferred stock

d) stock options

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