caldwell company has 20 000 shares of common stock outstanding d 245889

Caldwell Company has 20,000 shares of common stock outstanding during all of 2007. It also has two convertible securities outstanding at the end of 2007. These are:

1. Convertible preferred stock: 2,000 shares of 9.5%, $50 par, preferred stock were issued on January 2, 2007 for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared. To date, no preferred stock has been converted.

2. Convertible bonds: Bonds with a face value of $200,000 and an interest rate of 5.7% were issued at par in 2006. Each $1,000 bond is convertible into 22 shares of common stock. To date, no bonds have been converted.

The company earned net income of $61,500 during 2007. Its income tax rate is 30%.


Compute the 2007 diluted earnings per share. What earnings per share amount(s) would Caldwell report on its 2007 income statement?

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