At December 31, 2013, HIJ had 2,000 common shares outstanding.On January 1, 2014, HIJ issued 1,000 convertible preferred (one share of common for one share of preferred)shares.During 2014, HIJ declared and paid $4,000 cash dividends on the common and $4,000 cash dividends on the preferred (the annual requirement).Net income for the year ended December 31, 2014, was $36,000.Assuming an income tax rate of 50 percent, what should be diluted earnings per share for the year ended December 31, 2014?

Question

Quizplus · Accepted Answer

The Answer of At December 31, 2013, HIJ had 2,000 common shares outstanding.On January 1, 2014, HIJ issued 1,000 convertible preferred (one share of common for one share of preferred)shares.During 2014, HIJ declared and paid $4,000 cash dividends on the common and $4,000 cash dividends on the preferred (the annual requirement).Net income for the year ended December 31, 2014, was $36,000.Assuming an income tax rate of 50 percent, what should be diluted earnings per share for the year ended December 31, 2014?

At December 31, 2013, HIJ Had 2,000 Common Shares Outstanding