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Okay so what I want to know is.... how do you get the values 30,000, 96,000, and 50,000 The problem is correct, but I'm struggling
Okay so what I want to know is.... how do you get the values 30,000, 96,000, and 50,000
The problem is correct, but I'm struggling to get 96,000, 30,000, and 50,000. Can you please show work on how you get these values.
6. On January 1, 2020, Crocker Company issued 10-year, $2,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Crocker common stock. Crocker's net income in 2020 was $400,000, and its tax rate was 20%. The company had 100,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. Instructions (a) Compute diluted earnings per share for 2020. (b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $1,000,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Crocker common stock. Basic earning per share = Net income/Share outstanding = 400000/100000 = 4 per share = a) Diluted earning per share = (400000+96000)/(100000+30000) = 3.82 per share b) Diluted earning per share = 400000/(100000+50000) = 2.67 per share = =Step by Step Solution
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