XYZ Company Had 200,000 Shares of Common Stock Outstanding on December

question 98

Essay

XYZ Company had 200,000 shares of common stock outstanding on December 31, 2012. On July 1, 2013, XYZ issued an additional 50,000 shares for cash. On January 1, 2013, XYZ issued 20,000 shares of convertible preferred stock. The preferred stock had a par value of $100 per share and paid a 5% dividend. Each share of preferred stock is convertible into 8 shares of common. During 2013, XYZ paid the regular annual dividend on the preferred and common stock. Net income for the year was $300,000.
Required:
Calculate XYZ's basic and diluted earnings per share (rounded to 2 decimal places) for 2013.

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Definitions:

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.

Pavlov's Dogs

An experiment by Ivan Pavlov demonstrating classical conditioning through the use of dogs, bells, and food, showing how associative learning works.

Little Albert

The subject of a famous psychology experiment by John B. Watson, demonstrating that emotional responses can be conditioned in humans.

Fear / Distress Response

An emotional and physiological reaction to perceived threats or danger, involving the activation of the fight or flight response.