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A company has the following information: Net income: $500,000 Preferred dividends: $50,000 Weighted average common shares: 100,000 Requirements: (a) Calculate the basic EPS. (b) Determine

A company has the following information:

Net income: $500,000
Preferred dividends: $50,000
Weighted average common shares: 100,000

Requirements:

(a) Calculate the basic EPS. (b) Determine the diluted EPS if there are 10,000 convertible bonds, each convertible into 2 shares. (c) Analyze the impact of EPS on investor decisions. (d) Discuss the factors affecting EPS calculations.

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