January $1$: Beginning Balance $100,000$ shares.

April $1$: Issued $30,000$ for cash.

July $1$: Buyback $23,000$ shares.

November $1$: Issued $15,000$ shares for cash.

On December $31$ the company reported a $$1,000,000$ net income. The company does not sell preferred stock. There are stock options outstanding for $35,000$ shares at an option price of $$15$ per share. The current market price for the stock is $$25$ per share. The company sold $$100,000$ in $8\%$ convertible bonds. Each bond has a face value of $$1,000$ and is convertible into $5$ shares of common stock. The company is in a $30\%$ tax bracket.

Required:

Calculate the weighted average number of shares.

Calculate the earnings per share.

Calculate the diluted earnings per share.

Answer rating: 100% (QA)

ANSWER To calculate the weighted average number of shares we need to consider the changes in shares ... View the full answer