Asked by Jason Garcia on Jun 25, 2024
Verified
The following information has been obtained from the Mastic Corporation:
• 550,000 shares of common stock were outstanding on January 1,2015.
• Bonds convertible into 50,000 shares of common stock were issued on July 1,2015;the bonds have been determined to be dilutive.
• 36,000 shares of common stock were issued on November 1,2015.
• 24,000 shares of common stock were purchased on December 1,2015.
What is the weighted average number of shares to be used in the calculation of diluted earnings per share for 2015?
A) 612,000
B) 587,000
C) 604,000
D) 579,000
Common Stock
Equity ownership in a corporation, with voting rights and eligibility to receive dividends.
Convertible Bonds
Bonds that can be converted into a predetermined number of a company's shares, typically at the discretion of the bondholder, blending debt and equity investment characteristics.
Diluted Earnings
A calculation of a company's earnings that takes into account all potential shares that could be claimed or converted into common stock, impacting the earnings per share metric.
- Identify the disclosure obligations for both diluted and basic earnings per share (EPS).
Verified Answer
AS
Alesha ShereeJun 28, 2024
Final Answer :
D
Explanation :
550,000 + 25,000 (50,000 × 6/12)+ 6,000 (36,000 × 2/12)- 2,000 (-36,000 × 1/12)= 579,000
Learning Objectives
- Identify the disclosure obligations for both diluted and basic earnings per share (EPS).