Question
Smile corp had 900,000 net income in 2018. The tax rate is 40%. 220,0000 shares of common stock outstanding throughout 2018. Smile corp had the
Smile corp had 900,000 net income in 2018. The tax rate is 40%. 220,0000 shares of common stock outstanding throughout 2018.
Smile corp had the following potentially dilutive securities.
-There are 30,000 options to buy common stock at 40 a share outstanding. The market price of the common stock averaged 50 during 2018.
. During 2018, there were 40,000 shares of Cumulative convertible 7% preferred stock outstanding. The preferred is $100 par, pays $3.50 a year dividend, and is convertible into three shares of common stock.
-Smile Corp issued $1,800,000 of 8% convertible bonds at face value during 2017. Each $1,000 bond is convertible into 30 shares of common stock.
Requirements:
Compute diluted earnings per share for 2018. Complete the schedule and show all computations.
Security Net Income Adjustment Adjusted Net Income Shares Adjustment Adjusted Shares EPS
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started