Question
The following information was taken from the books and records of Pharoah, Inc. 1. Net Income $445,200 2. Capital structure: a. Convertible 6% bonds. Each
The following information was taken from the books and records of Pharoah, Inc.
1. Net Income $445,200
2. Capital structure:
a. Convertible 6% bonds. Each of the 300, $1,000 bonds is convertible
into 50 shares of common stock at the present date and for the next
10 years. 300,000
b. $10 par common stock, 210,000 shares issued and outstanding during
the entire year. 2,100,000
c. Stock warrants outstanding to buy 14,720 shares of common stock at
$20 per share
3. Other information:
a. Bonds converted during the year None
b. Income tax rate 30%
c. Convertible debt was outstanding the entire year
d. Average market price per share of common stock during the year $32
e. Warrants were outstanding the entire year
f. Warrants exercised during the year None
(a1) Compute basic earnings per share.
Basic earnings per share $_________________
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