At December 31,2013,Morrison Company Had 700 Shares of Common Stock

question 31

Multiple Choice

At December 31,2013,Morrison Company had 700 shares of common stock outstanding.On September 1,2014,an additional 300 shares of common stock were issued.In addition,Morrison had $20,000 of 8 percent convertible bonds outstanding at December 31,2013,which are convertible into 400 shares of common stock.No bonds were converted into common stock in 2014.Net income for the year ended December 31,2014,was $6,000.Assuming an income tax rate of 50 percent what would be the company's diluted earnings per share for the year ended December 31,2014?

• A) $7.50
• B) $5.67
• C) $5.00
• D) $4.33

---

Definitions:

Demand

Demand refers to consumers' desire and willingness to purchase a good or service at a specific price level.

Labor

The deployment of human intellectual and bodily efforts towards the creation of products and services.

Price Capital

The cost of acquiring assets used for production, such as machinery or buildings, often referred to as investment in capital goods.

Employment Decline

A reduction in the number of employed individuals within a specific job market, sector, or economy over a certain period.