Calculate basic earnings per share for mayfair enterprises

Reference no: EM132217113

Question - Calculating Earnings per Share

During 2016, Mayfair Enterprises had the following securities outstanding:

1.250,000 shares of common stock with an average market price of $25 per share.

2. 9.5% convertible preferred, which had been sold at its par value of $100. The preferred stock is convertible into three shares of common stock and 3,000 preferred shares are currently outstanding.

During 2016, Mayfair Enterprises earned net income after income taxes of $3.2 million.

(a) Calculate the basic earnings per share for Mayfair Enterprises for 2016.

(b) Calculate the diluted earnings per share for Mayfair Enterprises for 2016.

Reference no: EM132217113

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len2217113

1/16/2019 11:18:24 PM

HINT: For basic EPS, remember to reduce net income by the preferred stock dividend. Round answer two decimal places. HINT: For diluted EPS, remember to include additional shares (converted to common stock) in total number of shares outstanding. Round to two decimal places.

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