At December 31, 20X1 and 20X0, Gravin Corporation had 90,000 shares of common stock and 20,000 shares of convertible preferred stock outstanding, in addition to 9% convertible bonds payable in the face amount of $2,000,000. During 20X1, Gravin paid dividends of $2.50 per share on the preferred stock. The preferred stock is convertible into 20,000 shares of common stock. The 9% convertible bonds are convertible into 30,000 shares of common stock. Net income for 20X1 was $970,000. Assume an income tax rate of 40%.
How much is the diluted earnings per share for the year ended December 31, 20X1?Answers:a) 7.70b) 8.21c) 9.35d) 10.22
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