At December 31,2013,DeSoto Company had 500,000 shares of common stock outstanding.DeSoto sold 50,000 shares on October 1,2014.Net income for 2014 was $2,417,875; the income tax rate was 30%.In addition,DeSoto had the following debt and equity securities on its books on December 31,2014:
(a)18,000 shares of $100 par,12% cumulative preferred stock.
(b)28,000 shares of $100 par,10% cumulative preferred stock,par $100,sold at 110.Each share of preferred stock is convertible into 2 shares of common stock.
(c)$2,000,000 face value of 9% bonds sold at par.
(d)$3,000,000 face value of 7% convertible bonds sold to yield 8%.Unamortized bond discount is $100,000 at December 31,2014.Each $1,000 bond is convertible into 20 shares of common stock.
Options to purchase 10,000 shares of common stock were issued May 1,2014.
Exercise price is $30 per share; market value at date of option was $29; average market value May 1 to December 31,2014,was $40.
Compute the earnings per share amounts for the year ended December 31,2014.
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