In 2019, ABC Company has $100,000 of Net Income, $10,000 of Preferred Stock dividends, and 10,000 common
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Question:
In 2019, ABC Company has $100,000 of Net Income, $10,000 of Preferred Stock dividends, and 10,000 common shares outstanding all year. On July 1st, 2019, a 5% $1,000,000 convertible bond was issued. The bond is discounted at $900,000 and will be convertible into 25,000 common shares. The tax rate is 21%.
What would the formula for diluted earnings per share be? and how would you solve it?
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