Question

On December 31, 2020, Berclair Inc. had 580 million shares of common stock and 6 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 176 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $1,100 million.

Also outstanding at December 31 were 30 million incentive stock options granted to key executives on September 13, 2013. The options were exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market price of the common shares averaged $70 per share.

Required:

Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Do not round intermediate calculations.)

Answer 1

Answer to question

		in millions
Earnings per share for the year ended December 31, 2021
	Basic	Diluted
Net profit attributable to equity shareholders
Net income for the year ended December 31, 2021	$                              1,100.00	$      1,100.00
Dividend to cumulative preferred stock	$                                  -54.00	$           -54.00
(6*100*9%)
Net profit attributable to equity shareholders	$                              1,046.00	$      1,046.00
Divided by Weighted average number of shares	745.57	751.57
Earning per share	$                                      1.40	$               1.39
Note
				Weighted average number of shares
Date	Particualrs	Shares	Period	Basic	Diluted
December 31, 2020	common stock	580	12	580.00	580.00
On March 1, 2021	common stock as treasury stock	176	10	146.67	146.67
July 1, 2021.	common stock dividend	37.8	6	18.90	18.90
	756			0
				0
September 13, 2013	stock options			0	6
	stock options granted	30		0
	if issued at market price	24		0
				745.57	751.57