6. Thistle Limited has the following information at 31 December 20X5. • 1,000,000 common shares outstanding with the par value of $0.50. Net income for the year is $1,330,000. Net income attributable to equity holders of the company is $1,230,000. Net income attributable to non-controlling interest of the subsidiaries is $100,000. • Options of 500,000 shares with the exercise price of $3.25 per share. Convertible 10% bonds of $1,000,000 convertible in year 20X6 into 250,000 common shares. Convertible 8% preferred shares of $1 each totaling $1,000,000 convertible in year 20X7 at 1 common share for every 40 preferred shares. • Tax rate is 40%. Year-end market price per common share is $4.25. Average market price per common share is $4. a. Calculate basic earnings per share. b. Calculate diluted earnings per share by applying the procedure and sequential steps in the lecture note.

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.