On December 31, 2023, Berclair Incorporated had 300 million shares of common stock and 13 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 30 million shares of its common stock as treasury stock. • Berclair issued a 4% common stock dividend on July 1, 2024. • Four million treasury shares were sold on October 1. • Net income for the year ended December 31, 2024, was $650 million. • Also outstanding at December 31 were 60 million incentive stock options granted to key executives on September 13, 2019. • The options were exercisable as of September 13, 2023, for 60 million common shares at an exercise price of $60 per share. ⚫ During 2024, the market price of the common shares averaged $80 per share. • The options were exercised on September 1, 2024. Required: Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have been adjusted for any stock split or stock dividend.) Note: Do not round intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Numerator Basic $ 533 Diluted $ 533 Answer is complete but not entirely correct. Earnings per Share + Denominator 300 $ 338 $ 1.78 1.58
On December 31, 2023, Berclair Incorporated had 300 million shares of common stock and 13 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 30 million shares of its common stock as treasury stock. • Berclair issued a 4% common stock dividend on July 1, 2024. • Four million treasury shares were sold on October 1. • Net income for the year ended December 31, 2024, was $650 million. • Also outstanding at December 31 were 60 million incentive stock options granted to key executives on September 13, 2019. • The options were exercisable as of September 13, 2023, for 60 million common shares at an exercise price of $60 per share. ⚫ During 2024, the market price of the common shares averaged $80 per share. • The options were exercised on September 1, 2024. Required: Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have been adjusted for any stock split or stock dividend.) Note: Do not round intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Numerator Basic $ 533 Diluted $ 533 Answer is complete but not entirely correct. Earnings per Share + Denominator 300 $ 338 $ 1.78 1.58
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Munabhai
Transcribed Image Text:On December 31, 2023, Berclair Incorporated had 300 million shares of common stock and 13 million shares of 9%, $100 par value
cumulative preferred stock issued and outstanding.
• On March 1, 2024, Berclair purchased 30 million shares of its common stock as treasury stock.
• Berclair issued a 4% common stock dividend on July 1, 2024.
• Four million treasury shares were sold on October 1.
• Net income for the year ended December 31, 2024, was $650 million.
. Also outstanding at December 31 were 60 million incentive stock options granted to key executives on September 13, 2019.
⚫ The options were exercisable as of September 13, 2023, for 60 million common shares at an exercise price of $60 per share.
• During 2024, the market price of the common shares averaged $80 per share.
• The options were exercised on September 1, 2024.
Required:
Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and
conversion of convertible securities have been adjusted for any stock split or stock dividend.)
Note: Do not round intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).
Numerator
Basic
$
533
Diluted
$
533
Answer is complete but not entirely correct.
Denominator
Earnings per Share
300
$
1.78
338
$
1.58
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