Compute basic earnings per share

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Reference no: EM131606441

Online Network Inc. has a net income of $580,000 in the current fiscal year. There are 100,000 shares of common stock outstanding along with convertible bonds, which have a total face value of $1.4 million. The $1.4 million is represented by 1,400 different $1,000 bonds. Each $1,000 bond pays 7 percent interest. The conversion ratio is 10. The firm is in a 40 percent tax bracket.

a. Compute basic earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.)

Basic earnings per share

b. Compute diluted earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.)

Diluted earnings per share

Reference no: EM131606441

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