Frost Company

The Frost Company has accumulated the following information relevant to its 2010 earnings per share.

1. Net income for 2010 is $150,500.
2. Common Stock:
a. Outstanding on Jan, 1 2010- 25,000 shares
b. Issue for Cash:
i. August 4- 7,000 Shares
c. Issued as a stock dividend:
i. September 8- 6,400 shares (20% stock dividend)
d. Teasury Stock
i. November 30- 2,000 shares were reacquired as treasury stock

3. Bonds Payable
a. On January 1, 2010 the company had issue 10%, $200,000 bonds at 110. The premium is being amortized in the amount of $1,000 per year. Each $1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted.
b. Bonds payable: On December 31, 2008, the company had issued $540,000 of 5.8% bonds at par. Each $1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds ahve been converted.

4. Preferred stock: On July 1, 2009 the company had issued 3,800 shares of 7.5% $100 par, preferred stock at $108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid.

5. Compensatory stock options: Options to acquire common stock at a price of $33 per share were outstanding during all of 2010. Currently 4,000 shares may be acquired. To date, no options have been exercised.

6. Miscellaneous:

a. Stock markets prices:
i. 2010 average- $41 per share
ii. 2010 ending – $40 per sahre
b. Corporate income tax rate is 30%.