Question
5. Throughout 2015, Smith had 520,000 shares of common stock outstanding. Smiths net income for the year ended December 31, 2015 was $4,688,000. Smiths income
5. Throughout 2015, Smith had 520,000 shares of common stock outstanding. Smiths net income for the year ended December 31, 2015 was $4,688,000. Smiths income tax rate is 22%.
During the entire year ending 12-31-15, Smith had 40,000 outstanding employee stock options. Each option had an exercise price of $40 per share of Smith common stock. During the year ended 12-31-15, the average market price of Smiths common stock was $50 per share.
As of 12-31-15, Smith had $6,000,000 of 4% convertible bonds. Smith issued the bonds at face value during 2012. The bonds can be converted into 200,000 shares of Smiths common stock.
What will Smith report as its diluted earnings per share for the year ended 12-31-15?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started