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Information from the financial statements of Topps Fambricators, Inc., Included the following : Common shares 100,000...

Information from the financial statements of Topps Fambricators, Inc., Included the following :

Common shares 100,000

Convertible preferred shares $100 par, 5% (convertible into 36,000 shares of common) 12,000

10% convertible bonds (convertible into 25,000 shares of common) $1,000,000

Stock options for 120,000 shares of common stock (option price of $20 per share; market price of $25 per share)

Topps's net income for the year ended December 31,2018, is $680,000. The income tax rate is 40%.

Topps paid dividends of $5 per share on its preferred stock during 2018.

Compute basic and diluted earnings per share for the year ended December 31, 2018.

(Basic earnings per share is $6.20 and diluted earnings per share is $4.00. Could you please explain me why diluted EPS is $4.00). Thank you

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ekkarill92 answered 1 year ago
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