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Question 7 Tamarisk Corporation had net income for the current fiscal year of $600,600, and common shares outstanding of 78,000. There were no changes to Tamarisk's common shares during the year. Tamarisk also had outstanding a $1,000,000, 11% bond sold in a previous year that was convertible to 72,000 common shares. In addition, Tamarisk sold a new bond on October 1 of the current year. The new bond was a $1,000,000, 15% bond, convertible to 66,200 shares. Tamarisk was subject to a tax rate of 29%. (For simplicity, ignore the requirement to record the debt and equity portions of the convertible bond separately). Calculate Tamarisk's basic earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Basic earnings per share Calculate the after-tax interest paid on the 11% bonds. After-tax interest on 11% bonds Determine incremental per share effect for 11% bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.) Incremental Incremental Potentially dilutive security Numerator Effect Denominator Effect EPS 11% Bonds Calculate the after-tax interest paid on the 15% bonds. After-tax interest on 15% bonds sl Determine incremental per share effect for 15% bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.) Incremental Numerator Effect Incremental Denominator Effect EPS Potentially dilutive security 15% Bonds Rank the potentially dilutive securities from most dilutive to least dilutive. 11% bonds 15% bonds Calculate Tamarisk's diluted earnings per share. (Round calculations of EPS to 3 decimal places, e.g. $3.545 and provide final answer to 2 decimal places, e.g. 15.25.) Numerator Denominator EPS Basic EPS Sub Total Diluted EPS