During the current year, East Corporation had 3 million shares of common stock outstanding. 3,700, 7%...
During the current year, East Corporation had 3 million shares of common stock outstanding. 3,700, 7% convertible bonds, each with $1,000 face value, were issued at face amount at the beginning of the year. East reported income before tax of $7 million and net income of $4.2 million for the year. Each bond is convertible into 10 shares of common stock. What is diluted EPS? (Round your answer to 2 decimal places. Do not round your intermediate calculations.)
rev: 04_09_2018_QC_CS-123854, 05_25_2018_QC_CS-127783
Multiple Choice
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$1.40.
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$1.44.
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$1.38.
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$1.43.
Homework Answers
Basic earning per share = 4200000/3000000 = 1.40 per share
Income tax rate = 2.8/7 = 40%
Diluted earning per share = Adjusted net income/Adjusted shares = (4200000+155400)/(3000000+37000) = 1.43
So answer is a) $1.40
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