Pubco is a public company that uses  a calender year and has complex structure. In the computation of its basic an diluted earning per share in accordance with SFAS 128, Pubco uses income before extraordinary items as the control number. Pubco reported no discontinued operaions, but it has extraordinary loss (net of tax) OF $1.2 million in the first quarter when its income before the extraordinary item was $1 million.

The average market price of Pubco's common stock for the first quarter was $25, the share outstanding at the befinning of the period equaled 300,000 and 12,000 share were issued on March 1.

At the beginning of the quarter, Pubco had outastnding $2 million of 5% converible bonds, with each $1000 bond cpmtertible into 10 share of common stock. No bonds were conterted.

At the befinning of the quarter, Pubco alos had outstanding 120,000 shares of preferred stock paying a quearterly dividen of $.10 per share and convertible to common stock on one to one basis. Holders of 60,000 shares of preferred stock exercised their conversion privilege on February 1.

Throughout the first quarter, warrants to buy 50,000 share of Pubco's common stock for $28 per share were outstanding but unexercised.

Pubco's tax rate was 30%

The BEPS amount for Pubco's net income or loss available to common shareholders for the frist quarter after the extraordinary item is ?

The answer is (.6).

Thanks.

I am still a little confused on how did you calculated preferred dividen. Please help.

Thanks