As of January 2, 2012, The Triple J Company had (i) 12,000 shares of preferred
stock issued, with a par value of $7, an annual dividend of $2, and 3,000 shares in the
treasury, and (ii) 24,000 shares of common stock issued, with a stated value of $5 and
4,000 shares of treasury stock. On April 12, 2012, the company issued 8,000 additional
shares of common stock for cash.
Triple J's net income for the year ended December 31, 2012 was $278,000. It
also had stock warrants issued on September 30, 2012, that could be converted into
24,000 shares of common stock, beginning in 2015. In addition, the company had stock
options, outstanding since 2010, that could be exercised in 2014 for 12,000 shares.
(The original "strike" price was $20 per share, and the market value throughout 2012
was $29.50 per share. The cash that would be received from the hypothetical
conversion of the stock options at January 1, 2012 would permit Triple J to reacquire
8,138 shares of its own stock in the market place.)
What earnings per share did The Triple J Company report for 2012?
EPS BASIC = (Net Income less Preferred stock dividend) / Weighted Average Shares of Common Stock Outstanding? EPS DILUTED = (Net Income less Preferred stock dividend) / (Weighted Average shares of common stock outstanding plus Potential Stocks) ? Please put calculations to explain numbers.