What is the basic EPS? What is the diluted EPS?
A company had the following changes in its common stock shares outstanding for 2009:
January 1st: Beginning balance of 90,000
April 1st: Issued 30,000 shares for cash
July 1st: purchased 39,000 shares
November 1st: Issued 60,000 shares for cash
The company had a net income of $800,000. Also, it has 50,000 preferred common stock with 3% preferred dividends and each is convertible into 4 common shares.
What is this company’s weighted average number of shares outstanding?
What is the basic EPS?
What is the diluted EPS?
Suppose that on December 31st the company had 3 to 1 split. What is the basic and diluted EPS?
