Problem 16-8
The information below pertains to Pearl Company for 2018.
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Net income for the year $1,190,000
7% convertible bonds issued at par ($1,000Â per bond); each bond is convertible into
    30 shares of common stock 1,970,000
6% convertible, cumulative preferred stock, $100Â par value; each share is convertible
    into 3 shares of common stock 4,000,000
Common stock, $10 par value 6,280,000
Tax rate for 2018 40%
Average market price of common stock $25Â per share
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There were no changes during 2018 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 purchase 68,800 shares of common stock at $20 per share.
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(a) Compute basic earnings per share for 2018. (Round answer to 2 decimal places, e.g. $2.55.)
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Basic earnings per share$
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(b) Compute diluted earnings per share for 2018. (Round answer to 2 decimal places, e.g. $2.55.)
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Diluted earnings per share$
Answers
Status NEW
Posted 09 May 2017 01:05 AM
My Price 5.00
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