During 2011 falwell inc. had 500000 shares of common stock, Ask an Expert

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During 2011, Falwell Inc. had 500,000 shares of common stock and 50,000 shares of 6% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Falwell did not declare or pay any dividends during 2011.
Falwell's net income for the year ended December 31, 2011, was $2.5 million. The income tax rate is 40%. Falwell granted 10,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $29 per share. The options vest after one year. The market price of the common stock averaged $30 per share during 2011.

What is Falwell's basic earnings per share for 2011, rounded to the nearest cent?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M965362

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