Parnaby has 25,000 common stock shares outstanding and its 100%-owned subsidiary Sandal has 5,000 common stock shares outstanding. Parnaby and Sandal do not have any potentially dilutive securities outstanding. The separate net incomes for Parnaby and Sandal are $150,000 and $75,000, respectively. Diluted EPS for the consolidated company is
A. $5.00.
B. $6.00.
C. $7.50.
D. $9.00.
Answer:D
Parnaby has 25,000 common stock shares outstanding and its 100%-owned subsidiary Sandal has 5,000 common stock shares outstanding. Parnaby and Sandal do not have any potentially dilutive securities outstanding. The separate net incomes for Parnaby and Sandal are $150,000 and $75,000, respectively. Diluted EPS for the consolidated company is
A. $5.00. B. $6.00. C. $7.50. D. $9.00.
Explanation: D) ($150,000 + $75,000)/25,000