Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Brief Exercise 17-16 Wildhorse Corporation reported net income of $330,000 in 2017 and had 740,000 common shares outstanding throughout the year. On May 1, 2017,
Brief Exercise 17-16 Wildhorse Corporation reported net income of $330,000 in 2017 and had 740,000 common shares outstanding throughout the year. On May 1, 2017, wildhorse issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. Total proceeds at par amounted to $1,140,000, and was allocated to the liability and equity components under the residual value method. The liability component was measured first, at present value of the stream of interest payments plus present value of the bond maturity value, all discounted at 9% (the interest rate that applies to similar straight bonds). At the time of issuance, the liability component was recorded at $1,063,685. Wildhorse's tax rate is 30% Calculate Wildhorse's 2017 diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Earnings per share
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