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I—I‘. ull Jul Basic and diluted earnings per share The following data are presented by Wannan Ltd. for calendar 2014: Net income $4,500,000
Common shares outstanding, 1,000,000 shares 10%, non - cumulative preferred shares. convertible into 120,000 common shares$1,600,000
8% convertible bonds; convertible into 105,000 common shares $?,500,000
360,000 call options exercisable at $25 per share Additional information: 1. The common and preferred shares and the convertible bonds were outstanding from the
beginning of the year. 2. In 2014, a $500,000 dividend was declared and distributed, however. no dividends were
declared in 2013. 3. The average market price of the common shares in 2014 was $30. The stock price was $2?
on January 1, 2014, and $35 on December 31, 2014. 4. The convertible bonds were sold at par. 5. The income tax rate for 2014 is 30%. Instructions a. Calculate basic EPS. b. Calculate diluted EPS.

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a). Basic EPS=$4 per share... View the full answer

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