The net income of Charles Company for the year ended December 31, 2002 was $300,000. The...

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The net income of Charles Company for the year ended December 31, 2002 was $300,000. The following additional information is available about the Company; - The weighted average number of shares outstanding during the year was 21,000. - During the year 2,000 shares of $100 par, 6% convertible preferred stock were outstanding. Each preferred stock is convertible into 2 share of common stock. - During the year, 50 bonds each of $1,000 face value were outstanding. The bonds were issued at par, pay 14% interest per year, and are convertible into 30 shares of common stock. - There were 5,000 options (each convertible into 2 shares) outstanding, with an option price of $22 each. The average market price for the period was $24. Calculate the basic and diluted earnings per share, assuming that the tax rate for the company is 40%. The net income of Charles Company for the year ended December 31, 2002 was $300,000. The following additional information is available about the Company; - The weighted average number of shares outstanding during the year was 21,000. - During the year 2,000 shares of $100 par, 6% convertible preferred stock were outstanding. Each preferred stock is convertible into 2 share of common stock. - During the year, 50 bonds each of $1,000 face value were outstanding. The bonds were issued at par, pay 14% interest per year, and are convertible into 30 shares of common stock. - There were 5,000 options (each convertible into 2 shares) outstanding, with an option price of $22 each. The average market price for the period was $24. Calculate the basic and diluted earnings per share, assuming that the tax rate for the company is 40%.

Answer rating: 100% (QA)

To calculate the basic earnings per share we divide the net income by the weighted average number of shares outstanding Basic EPS Net Income Weighted Average Number of Shares Outstanding Basic EPS 300... View the full answer