Question
On January 1, 2017, Flint Company issued 10-year, $2,140,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 14 shares of Flint
On January 1, 2017, Flint Company issued 10-year, $2,140,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 14 shares of Flint common stock. Flints net income in 2017 was $296,000, and its tax rate was 40%. The company had 91,000 shares of common stock outstanding throughout 2017. None of the bonds were converted in 2017.
(a) Compute diluted earnings per share for 2017. (Round answer to 2 decimal places, e.g. $2.55.)
Diluted earnings per share $
(b) Compute diluted earnings per share for 2017, assuming the same facts as above, except that $910,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Flint common stock. (Round answer to 2 decimal places, e.g. $2.55.)
Diluted earnings per share $
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