QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

50. The following financial information is available at the end of the year.

Share Information

Security Authorized Issued &

Other features

outstanding

Common stock 500,000 250,000 Currently pays a dividend

of $1 per share.

Preferred stock, series A 50,000 12,000 Nonconvertible,

cumulative; pays a dividend

of $4 per share.

Preferred stock, series B 50,000 30,000 Convertible; pays a

dividend of $7.50 per share.

Each share is convertible

into 2.5 common shares.

Additional Information:

Retained earnings at start of year = $6,000,000

Reported income for the year = $1,000,000

The diluted EPS is closest to:

A. $2.91.

B. $2.93.

C. $3.08.