Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

During 2019, Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2019, the company issued 10,000, 7% convertible bonds at par.

image text in transcribed

During 2019, Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2019, the company issued 10,000, 7% convertible bonds at par. The maturity value of each bond is $1,000. Each bond is convertible into 20 shares of common stock. None were converted during 2019. Dawson also had 60,000 stock warrants outstanding for all of 2019. The option price is $10 per share. The market price of the common stock was $40 on December 31, 2019, and the average market price for 2019 was $30. Dawson reported a net income of $3,650,000 for 2019. Assume the company had a 40 percent income tax rate. (a) Compute the basic earnings per share. (b) Compute diluted earnings per share

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Statistical Techniques For Analytical Review In Auditing

Authors: Kenneth W. Stringer, Trevor R. Stewart

1st Edition

047186076X, 978-0471860761

More Books

Students also viewed these Accounting questions