Peter Corporation owns 90% of the common stock of Subsidiary Subway.The following data is available:
The preferred stock is cumulative and convertible.The annual preferred dividends are $10,000.
Required:
1.Subway's preferred stock is convertible into 12,000 shares of Subway's common stock.Peter and Subway do not have any other potentially dilutive securities outstanding.
a.What is Subway's basic EPS and diluted EPS?
b.What is consolidated basic EPS and diluted EPS?
2.Subway's preferred stock is convertible into 12,000 shares of Peter's common stock.Peter and Subway do not have any other potentially dilutive securities outstanding.What is consolidated basic EPS and diluted EPS?

Question

Peter Corporation owns 90% of the common stock of Subsidiary Subway.The following data is available:
  The preferred stock is cumulative and convertible.The annual preferred dividends are $10,000.
Required:
1.Subway's preferred stock is convertible into 12,000 shares of Subway's common stock.Peter and Subway do not have any other potentially dilutive securities outstanding.
a.What is Subway's basic EPS and diluted EPS?
b.What is consolidated basic EPS and diluted EPS?
2.Subway's preferred stock is convertible into 12,000 shares of Peter's common stock.Peter and Subway do not have any other potentially dilutive securities outstanding.What is consolidated basic EPS and diluted EPS?

Quizplus · Accepted Answer

The Answer of Peter Corporation owns 90% of the common stock of Subsidiary Subway.The following data is available:
  The preferred stock is cumulative and convertible.The annual preferred dividends are $10,000.
Required:
1.Subway's preferred stock is convertible into 12,000 shares of Subway's common stock.Peter and Subway do not have any other potentially dilutive securities outstanding.
a.What is Subway's basic EPS and diluted EPS?
b.What is consolidated basic EPS and diluted EPS?
2.Subway's preferred stock is convertible into 12,000 shares of Peter's common stock.Peter and Subway do not have any other potentially dilutive securities outstanding.What is consolidated basic EPS and diluted EPS?

Peter Corporation Owns 90% of the Common Stock of Subsidiary