scorpio
Mar 26, 2007, 05:18 PM
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The company has 20000 shares of common stock outstanding during all of 2006. It also has two convertible securities at the end of 2006. They are:
1)
Convertible preferred stock: 2000 shares of 9.5%, $50.00 par, preferred stock were issued on January 2, 2006 for $60.00 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared. To date, no preferred stock has been converted.
2)
Convertible bonds: Bonds with a face value of $200000.00 and an interest rate of 5.7% were issued at par in 2005. Each $1000.00 bond is convertible into 22 shares of common stock. To date, no bonds have been converted.
The company earned net income of $61500.00 during 2006 with a tax rate of 30%.
Compute the diluted earnings per share. What share amount would the company report on its 2006 income statement?
The company has 20000 shares of common stock outstanding during all of 2006. It also has two convertible securities at the end of 2006. They are:
1)
Convertible preferred stock: 2000 shares of 9.5%, $50.00 par, preferred stock were issued on January 2, 2006 for $60.00 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared. To date, no preferred stock has been converted.
2)
Convertible bonds: Bonds with a face value of $200000.00 and an interest rate of 5.7% were issued at par in 2005. Each $1000.00 bond is convertible into 22 shares of common stock. To date, no bonds have been converted.
The company earned net income of $61500.00 during 2006 with a tax rate of 30%.
Compute the diluted earnings per share. What share amount would the company report on its 2006 income statement?