View Policies Current Attempt in Progress Pharoah Corporation had net income of $50,100 for the year ended December 31, 2020, and a weighted average number of common shares outstanding of 13,500. The following information is provided regarding the capital structure: 1. 5% convertible debt, 220 bonds each convertible into 43 common shares. The bonds were outstanding for the entire year. The income tax rate is 40%. The bonds were issued at par ($1,000 per bond). No bonds were converted during the year. 2. 3% convertible, cumulative $100 preferred shares, 1,000 shares issued and outstanding. Each preferred share is convertible into 2 common shares. The preferred shares were issued at par and were outstanding the entire year. No shares were converted during the year. Calculate the income effect of the dividends on preferred shares. $ Dividends on preferred shares e Textbook and Media Calculate the basic earnings per share for 2020. (Round answer to 2 decimal places, e.g. 15.25.) $ Basic earnings per share e Textbook and Media Calculate the after-tax interest paid on the 5% bonds. $ After-tax interest on bonds converted e Textbook and Media Determine an incremental per share effect for 5% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.) Incremental Numerator Effect Incremental Denominator Effect Potentially dilutive security EPS 5% Bonds $ $ e Textbook and Media Determine an incremental per share effect for 3% preferred shares. (Round earnings per share to 2 decimal places, e.g. 15.25.) Incremental Numerator Effect Incremental Denominator Effect Potentially dilutive security EPS 3% Preferred shares $ $ e Textbook and Media Rank the potentially dilutive securities from most dilutive to least dilutive. 5% Bonds 3% Preferred shares Rank 1 Rank 2 Anti-dilutive e Textbook and Media Calculate the diluted earnings per share for 2020, using the if-converted method. For simplicity, ignore the requirement to record the debt and equity components of the bonds separately. (Round earnings per share to 2 decimal places, e.g. 15.25.) Numerator Denominator EPS $ $ Basic Sub Total $ $ Diluted EPS e Textbook and Media When Pharoah Corporation issued the 5% convertible debt, would the company's interest rate on straight debt have been higher or lower than 5%? When Pharoah Corporation issued the 5% convertible debt, the company's interest rate on straight debt have been lower higher e Textbook and Media