Question - Assume that the following data relate to Rosen, Inc. for the year 2015:
Net income (40% tax rate) $3,500,000
Average common shares outstanding 2015 1,000,000 shares 8% cumulative convertible preferred stock:
Convertible into 80,000 shares of common $2,000,000 5% convertible bonds; convertible into 75,000 shares of common $4,000,000
Stock options:
Exercisable at the option price of $30 per share; average market price in 2015, $35 84,000 shares
Instructions - Compute (a) basic earnings per share, and (b) diluted earnings per share.