On December 31, 2012, Berclair Inc. had 200 million shares ofcommon stock and 3 million shares of 9%, $100 par value cumulativepreferred stock issued and outstanding. On March 1, 2013, Berclairpurchased 24 million shares of its common stock as treasury stock.Berclair issued a 5% common stock dividend on July 1, 2013. Fourmillion treasury shares were sold on October 1. Net income for theyear ended December 31, 2013, was $150 million.Income tax rate is40%. Also outstanding at December 31 were incentive stock optionsgranted to key executives on September 13, 2008. The options areexercisable as of September 13, 2012, for 30 million common sharesat an exercise price of $56 per share. During 2013, the marketprice of the common shares averaged $70 per share. $62.5 million of8% bonds, convertible into 6 millions common shares, were issued atface value in 2009.
Required: Compute Berclair's basic and diluted earnings pershare for the year ended December 31, 2013.
On December 31, 2012, Berclair Inc. had 200 million shares ofcommon stock and 3 million shares of 9%, $100 par value cumulativepreferred stock issued and outstanding. On March 1, 2013, Berclairpurchased 24 million shares of its common stock as treasury stock.Berclair issued a 5% common stock dividend on July 1, 2013. Fourmillion treasury shares were sold on October 1. Net income for theyear ended December 31, 2013, was $150 million.Income tax rate is40%. Also outstanding at December 31 were incentive stock optionsgranted to key executives on September 13, 2008. The options areexercisable as of September 13, 2012, for 30 million common sharesat an exercise price of $56 per share. During 2013, the marketprice of the common shares averaged $70 per share. $62.5 million of8% bonds, convertible into 6 millions common shares, were issued atface value in 2009.
Required: Compute Berclair's basic and diluted earnings pershare for the year ended December 31, 2013.
