Plymouth Company holds a 90% interest in Savannah, Inc., which was acquired in a previous year. As of the end of the current fiscal period, the following information is available:
Plymouth Savannah Internally generated net income $80,000 $60,000 Weighted average common shares outstanding 25,000 12,000 Warrants to acquire sub’s common stock: Held by unaffiliated investors 2,000 Warrants to acquire parent’s common stock: Held by Savannah 1,000 Held by unaffiliated investors 2,000 Preferred shares 5% convertible, par $100 1,000 Preferred shares 10% nonconvertible, par $2 5,000
The warrants to acquire Savannah stock were issued July 1 of the current year. Exercise price is $9; stock price is $12.
The warrants to acquire Plymouth stock were issued in a previous fiscal period. Exercise price is $12; stock price is $18.
Each share of convertible preferred can be converted into 5 shares of Savannah common stock. Plymouth owns 60% of the convertible preferred stock.
Required: Compute consolidated basic and diluted earnings per share for the current year. Ignore any tax effects.