During 2011, Piper paid dividends of $1.20 per share on its common stock and $3.

ID: 2364330 • Letter: D

Question

During 2011, Piper paid dividends of $1.20 per share on its common stock and $3.00 per shareon its preferred stock. The preferred stock is convertible into 30,000 shares of common stock.The 9% convertible bonds are convertible into 75,000 shares of common stock. The net incomefor the year ended December 31, 2011, was $600,000. Assume that the income tax rate was 30%.

What should be the diluted earnings per share for the year ended December 31, 2011,

rounded to the nearest penny?

A) $3.20

B) $2.95

C) $2.83

D) $2.35