In: Accounting
Problem 19-18 EPS; stock options; nonconvertible preferred; convertible bonds; shares sold [LO19-4, 19-5, 19-6, 19-7, 19-8, 19-9]
At January 1, 2018, Canaday Corporation had outstanding the
following securities:
720 million common shares
45 million 8% cumulative preferred shares, $50 par
4% convertible bonds, $4,500 million face amount, convertible into
90 million common shares
The following additional information is available:
On September 1, 2018, Canaday sold 81 million additional shares of common stock.
Incentive stock options to purchase 40 million shares of common stock after July 1, 2017, at $14 per share were outstanding at the beginning and end of 2018. The average market price of Canaday’s common stock was $20 per share during 2018.
Canaday's net income for the year ended December 31, 2018, was $1,524 million. The effective income tax rate was 40%.
Required:
1. & 2. Calculate basic and the diluted earnings per common
share for the year ended December 31, 2018. (Enter your answers in
millions (i.e., 10,000,000 should be entered as 10).)