During the year just ended, Berlin Co. had an outstanding 100,000 shares of common stock and 5,000 shares of noncumulative, $7 preferred stock. Each share of the latter is convertible into three shares of common. For the year, Berlin had $230,000 income from continuing operations and $575,000 of extraordinary losses; no dividends were paid or declared.
Berlin should report diluted earnings (loss) per share for income from continuing operations and for net income (loss), respectively, of:
A. $2.30 and ($3.45)
B. $2 and ($3)
C. $2.19 and ($3.29)
D. $2.26 and ($3.39)
Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan 1) and a levered plan (Plan II). Under Plan I, Kyle would have 900,000 shares of stock outstanding. Under Plan II, there would be 650,000 shares of stock outstanding and $10 million in debt outstanding. The interest rate on the debt is 10 percent, and there are no taxes.
If EBIT is $5 million, which plan will result in a higher EPS?
A corporation has 4,000 shares, 10% preferred stock of $55.00 par preferred stock, and 8,000 shares of common stock outstanding. The net income for the year is $260,000.
Calculate earnings per share.
A corporation had a current year net income of $2,375,000. It paid preferred dividends of $80,000 cash and had 500,000 weighted-average shares of common stock outstanding.
Calculate the corporation’s earnings per share.
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