During the current year, Comma Co. had outstanding: 25,000 shares of common stock, 8,000 shares of $20 par, 10% cumulative preferred stock, and 3,000 bonds that are $1,000 par and 9% convertible. The bonds were originally issued at par, and each bond was convertible into 30 shares of common stock. During the year, net income was $200,000, no dividends were declared, and the tax rate was 30%. What amount was Comma's basic earnings per share for the current year?
Comma's basic earnings per share for the current year is:
•($200,000 – $16,000) ÷ 25,000 weighted-average shares outstanding
•$184,000 ÷ 25,000 shares = $7.36 per common share
Can someone please explain where the 16,000 preferred cumulative dividend came from?
A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!
Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.
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