Question:
Wagnell's had 50,000,000 shares of common stock outstanding at January 1, 2004. On October 1, 2004, an additional 12,000,000 shares of common stock were issued for cash. Wagnell also bad $400,000,000 of 10% convertible bonds outstanding throughout 2004. The bonds were convertible into 250 common shares for each $1,000 bond lot. Wagnell's net income for the year ended December 31, 2004 is $250,000,000 and uses a tax rate of 40%.
Required:
Compute the basic and diluted earnings per share for the year ended December 31, 2004. Show aU computations.