Use the following info to calculate diluted EPS:
- The company’s net income = $350,000. Common shares outstanding throughout the year 275,000. No stock splits or stock dividends and tax rate is 30%.
- Each of the company’s 500 employees have 120 stock option warrants. Each option has an exercise price of $25 per share.
- The company has 700 shares of cumulative 7.25% preferred stock. The $100 par value is convertible to 7 shares of common stock.
- The company has $150,000 in convertible bonds. Bonds were issued at par with a yield of 7%. Each $1,000 can be converted to 45 shares of CS. The stock price for the company had an average of $32 throughout the year.