Dun & Harvey Inc. has 5,000,000 shares of $1 par value common stock outstanding at January 1. On July 1, Dun & Harvey issued 800,000 shares at a cost of $32 per share. In addition, at December 31, 2018, 150,000 shares were issuable upon exercise of executive stock options which an exercise price of $25 per share. The average market price of the company’s stock was $30 per share.
Dun & Harvey Inc. also has two convertible securities.
During 2018, Dun & Harvey’s net income was $8,800,000 and all preferred stock dividends were declared and paid. The company’s tax rate is 20%.
Instructions
Compute the diluted earnings per share for 2018.
Dun & Harvey Inc. has 5,000,000 shares of $1 par value common stock outstanding at January...
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