Calculate weighted average number of shares of common stock

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Question - Pepper Company had $900,000 net income in 2021. On January 1, 2021 there were 300,000 shares of common stock outstanding. On April 1, Pepper bought 40,000 shares of treasury stock and on September 1, 20,000 shares were issued. On December 1, a 10% stock dividend was declared and distributed. There are 50,000 options to buy common stock at $40 a share outstanding. The market price of the common stock averaged $50 during 2021. The tax rate is 40%.

During 2021, there were 40,000 shares of convertible preferred stock outstanding. The preferred is $100 par, pays $4.50 a year dividend, and is convertible into three shares of common stock.

Pepper issued $2,000,000 of 8% convertible bonds at face value during 2020. Each $1,000 bond is convertible into 30 shares of common stock. 

REQUIRED - Calculate the weighted average number of shares of common stock to be used to calculate basic earnings per share for 2021. Round your answer to the nearest whole dollar.

Reference no: EM132973931

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