At December 31, 2014, Channing Company had 2,000,000 shares of common stock outstanding.
On January 1, 2015, the company issued 500,000 shares of preferred stock which were convertible into 1,000,000 shares of common stock.
During 2015, the company declared and paid $1,200,000 cash dividends on the common stock. Also, $400,000 cash dividends were
declared and paid on the preferred stock. Net income for 2015 was $4,000,000.
The income tax rate is 30%. What should be diluted earnings per share for the year ended December 31, 2015? (Round to the nearest
penny.)
? $1.20
? $1.33
? $2.00
? $1.66