On December 31, 2020, the weighted average common shares outstanding during the year for Jaguars Corp. was 205,000. The market price of the common shares averaged $ 50 in 2020. The corporation’s income tax rate is 40%.

During 2020, there were 30,000 call options to buy common shares at $ 40 a share outstanding; and there were 20,000, $ 7, no par value, cumulative, and convertible preferred shares outstanding. Each preferred share is convertible into three common shares.

In 2019, the corporation issued $ 2,000,000 of 8% convertible bonds at face value. Each $ 1,000 bond is convertible into 20 common shares.

The corporation reported a $ 750,000 net income for calendar 2020.

Instructions

Showing all details, perform the following calculations and round all EPS figures to two decimal points:

1. The basic earnings per share (EPS) for 2020.
2. The diluted EPS with the call options.
3. The fully diluted EPS.

Answer rating: 100% (QA)

a The basic earnings per share 284 Explanation Basic earnings per share Net income available to comm... View the full answer