Refer to the income statement above. Assuming that Luther has no convertible bonds outstanding, then for the year ending December 31, 2006 Luther's diluted earnings per share are closest to ________
Luther Corporation
Consolidated Income Statement
Year ended December 31 (in $millions)
2006 2005
Total sales 610.1 578.3
Cost of sales -500.2 -481.9
Gross profit 109.9 96.4
Selling, general, and
administrative expenses -40.5 -39.0
Research and development -24.6 -22.8
Depreciation and amortization -3.6 -3.3
Operating income 41.2 31.3
Other income -- --
Earnings before interest and taxes (EBIT) 41.2 31.3
Interest income (expense) -25.1 -15.8
Pretax income 16.1 15.5
Taxes -5.5 -5.3
Net income 10.6 10.2
Price per share $16 $15
Sharing outstanding (millions) 10.0 8.1
Stock options outstanding (millions) 0.3 0.2
Stockholders' Equity 126.6 63.6
Total Liabilities and Stockholders' Equity 533.1 386.7
A) $1.03
B) $0.51
C) $0.82
D) $1.23
Answer: A
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