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Compute basic and diluted EPS. And know if a convertible security is anti-dilutive. Canyon Corporation has 200,000 shares of common stock outstanding throughout 2018. In
Compute basic and diluted EPS. And know if a convertible security is anti-dilutive.
Canyon Corporation has 200,000 shares of common stock outstanding throughout 2018. In addition, the corporation has 3,000, 20-year, 9% bonds issued at par in 2016. Each $500 bond is convertible into 10 shares of common stock after 9/23/19. During the year 2018, the corporation earned $700,000 after deducting all expenses. The tax rate was 40%. Compute the basic and diluted EPS values. Determine if the bonds are an anti-dilutive security. Why or why not?
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