PKM maintained in circulation during 2020 the following values: 200,000 common shares ($ 2,000,000 of legal capital), 10,000 cumulative preferred shares, 8% ($ 500,000 of legal capital), and two exchangeable bond issues: 1) $ 1,000,000 at 10% , exchangeable at a rate of 40 common shares per bond (each bond is worth $ 1,000), 2) $ 3,000,000 at 8%, exchangeable for 16 shares each (each bond is worth $ 1,000). In addition, during 2020, PKM granted a stock option plan to an executive, through which he can acquire 20,000 common shares at $25 / share. The year-end market value of these shares is $ 35 / share. The net income for 2020 was $800,000 and the tax rate was 30%. Additionally, a 20% stock dividend was issued on December 30, 2020. There are no accumulated dividends (in arrears) on the preferred shares. Calculate: 1. Basic earning per share and 2. Diluted earning per share
PKM maintained in circulation during 2020 the following values: 200,000 common shares ($ 2,000,000 of legal capital), 10,000 cumulative
1) $ 1,000,000 at 10% , exchangeable at a rate of 40 common shares per bond (each bond is worth $ 1,000),
2) $ 3,000,000 at 8%, exchangeable for 16 shares each (each bond is worth $ 1,000).
In addition, during 2020, PKM granted a stock option plan to an executive, through which he can acquire 20,000 common shares at $25 / share. The year-end market value of these shares is $ 35 / share.
The net income for 2020 was $800,000 and the tax rate was 30%. Additionally, a 20% stock dividend was issued on December 30, 2020. There are no accumulated dividends (in arrears) on the preferred shares.
Calculate: 1. Basic earning per share and 2. Diluted earning per share
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