ew
c. 3/.08
d. $7.45
64. Cox Corporation had 1,200,000 shares of common
stock outstanding on January 1 and December 31, 2006. In
connection with the acquisition of a subsidiary company in
June 2005, Cox is required to issue 50,000 additional shares
of its common stock on July 1, 2007, to the former owners
of the subsidiary. Cox paid $200,000 in preferred stock
dividends in 2006, and reported net income of $3,400,000
for the year. Cox's diluted earnings per share for 2006
should be
a. $2.83
b. $2.72
c. $2.67
d. $2.56
65. On June 30, 2005, Lomond. Inc. issued twenty $10,000,
7% bonds at par. Each bond was convertible into 200 shares
of common stock. On January 1, 2006, 10,000 shares of
common stock were outstanding. The bondholders con-
verted all the bonds on July 1, 2006. The following amounts
were reported in Lomond's income statement for the year
ended December 31, 2006
Revenues
Operating expenses
Interest on bonds
Income before income tax
Income tax expense
Net income
What is Lomond's 2006 diluted earnings per share
