Given the following year-end information, compute Greenwood Corporation’s basic and diluted earnings per share.
• Net income, $15,000
• The income tax rate, 30%
• 4,000 shares of common stock were outstanding the entire year.
• 500 shares of 10%, $50 par (and issuance price) convertible preferred stock were outstanding the entire year.
Dividends of $2,500 were declared on this stock during the year. Each share of preferred stock is convertible into 5 shares of common stock.
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