单选题 As of January 1, a company had 22500 $10 par value common shares outstanding. On July 1, the company repurchased 5000 shares. The company also has 11000,10% , $100 par value preferred shares. If the company' s net income is $ 210000, its diluted earnings per share is closest to :

A、

A. $5.00.
B、

B. $7.50.
C、

C. $10.00.

【正确答案】 A

【答案解析】Since this company has a simple capital structure, basic and diluted EPS are equal. The numerator equals net income-preferred dividends = 210000- ( 11000 shares ×0.10 dividend×100 par) = 210000-110000 = 100000. The weighted average shares outstanding = 22500- (5000 shares repurehased ×0. 50 midyear) =22500-2500 =20000. Then, basic EPS = diluted EPS = 100000/20000 = $ 5 per share.