At January 1, 2016, Canaday Corporation had outstanding the following securities: 600 million common shares 20 million 6% cumulative preferred shares, $50 par 8% convertible bonds, $2,000 million face amount, convertible into 80 million common shares The following additional information is available: • On September 1, 2016, Canaday sold 72 million additional shares of common stock. • Incentive stock options to purchase 60 million shares of common stock after July 1, 2015, at $12 per share were outstanding at the beginning and end of 2016. The average market price of Canaday’s common stock was $18 per share during 2016. • Canaday’s net income for the year ended December 31, 2016, was $1,476 million. The effective income tax rate was 40%. Required: 1. Calculate basic earnings per common share for the year ended December 31, 2016. 2. Calculate the diluted earnings per common share for the year ended December 31, 2016.
At January 1, 2016, Canaday Corporation had outstanding the following securities:
600 million common shares
20 million 6% cumulative
8% convertible bonds, $2,000 million face amount, convertible into 80 million common shares
The following additional information is available:
• On September 1, 2016, Canaday sold 72 million additional shares of common stock.
• Incentive stock options to purchase 60 million shares of common stock after July 1, 2015, at $12 per share
were outstanding at the beginning and end of 2016. The average market price of Canaday’s common stock
was $18 per share during 2016.
• Canaday’s net income for the year ended December 31, 2016, was $1,476 million. The effective income tax
rate was 40%.
Required:
1. Calculate basic earnings per common share for the year ended December 31, 2016.
2. Calculate the diluted earnings per common share for the year ended December 31, 2016.
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