2A2V SELECTED FINANCIAL DATA FOR ABC COMPANY IS PRESENTED BELOW. • F...

75.

CSO: 2A2e

LOS: 2A2v

Selected financial data for ABC Company is presented below.

•

For the year just ended ABC has net income of $5,300,000.

•

$5,500,000 of 7% convertible bonds were issued in the prior year at a face value of

$1,000. Each bond is convertible into 50 shares of common stock. No bonds were

converted during the current year.

•

50,000 shares of 10% cumulative preferred stock, par value $100, were issued in the

prior year. Preferred dividends were not declared in the current year, but were current

at the end of the prior year.

•

At the beginning of the current year 1,060,000 shares of common stock were

outstanding.

•

On June 1 of the current year 60,000 shares of common stock were issued and sold.

•

ABC's average income tax rate is 40%.

ABC Company's basic earnings per share for the current fiscal year is

a.

$3.67.

b.

$4.29.

c.

$4.38.

d.

$4.73.