Problem 16-08

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The information below pertains to Ivanhoe Company for 2021.

Net income for the year$1,230,0008% convertible bonds issued at par ($1,000per bond); each bond is convertible into

30shares of common stock2,090,0006% convertible, cumulative preferred stock, $100par value; each share is convertible

into3shares of common stock3,830,000Common stock, $10 par value6,110,000Tax rate for 202120%Average market price of common stock$25per share

There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase80,600shares of common stock at $20per share.

(a)Compute basic earnings per share for 2021.(Round answer to 2 decimal places, e.g. $2.55.)

Basic earnings per share$

(b)Compute diluted earnings per share for 2021.(Round answer to 2 decimal places, e.g. $2.55.)

Diluted earnings per share$