Exercise 16-24

The Sweet Corporation issued 10-year, $5,380,000par,7% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is14:1, and in 2 years it will increase to17:1. At the date of issue, the bonds were sold at99. Bond discount is amortized on a straight-line basis. Sweet's effective tax was40%. Net income in 2017 was $9,000,000, and the company had1,980,000shares outstanding during the entire year.

(a)Compute both basic and diluted earnings per share.(Round answers to 2 decimal places, e.g. $2.55.)

Basic earnings per share$

Diluted earnings per share$