Fitzgerald, Inc. has 5 million shares of common stock outstanding on January 1,
2021. The company issued an addiFonal 1 million shares of common stock on April
1, 2021 and 500,000 more on July 1, 2021. On October 1, 2021, Fitzgerald issued
10,000 converFble bonds; each bond had a $1,000 face value and paid 7% interest.
Each bond is converFble into 40 shares of common stock. No bonds were converted
during 2021.
Required:
1. What are the weighted average common shares that would be included in the
basic EPS calculaFon for 2021?
2. What are the weighted average common shares that would be included in the
diluted EPS calculaFon for 2021?