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Dooley Co. had the following shares and bonds outstanding during 20A1:

- 200,000 shares of common stock
- 20,000 shares of convertible preferred stock
- $1,000,000 of 10% convertible bonds

The preferred stock is convertible into 40,000 shares of common stock. During 20A1, Dooley paid dividends of $1.20 per share on the common stock and $3.00 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 20A1 was $600,000, and the income tax rate was 30%.

Calculate the basic earnings per share for 20A1, rounded to the nearest cent.

Answer :

40,000 units of common shares can be obtained in exchange for the preferred stock. Dooley distributed dividends on the common shares in 20A1 in the amount of $1.20 per share.

How do you define stock?

These ownership certificates for any organization are generally referred to as "stocks." In contrast, a share refers to the shares of a certain company. Those who had shares in a specific company are referred to as shareholders. There are two types of stocks: preferred and common.

Why do investors purchase stocks?

Your investment portfolio may benefit from including stocks. Investing in stocks of various companies can help you increase your savings, shield your cash from hyperinflation and taxes, and increase the return on your assets. It's imperative to be knowledgeable about the risks involved with stock market investment.

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