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8. The Gradowski Corporation had net income of $ 150,000 during 19x5, with 10,000 shares of common stock outstanding. It also had 1,000 shares

 

8. The Gradowski Corporation had net income of $ 150,000 during 19x5, with 10,000 shares of common stock outstanding. It also had 1,000 shares of nonconvertible 5% $ 100 par preferred stock, and $ 25,000 par, 6% bonds convertible into 1,000 shares of common stock after 3 years. Assume a tax rate of 30% and compute basic and diluted EPS. 8a. If the bonds were only outstanding for half the year, how would diluted EPS change? 8b. If this bond has an annual discount amortization of $ 600, how much in interest savings should be added to the numerator?

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