Compute both basic and diluted earnings per share

Reference no: EM131770452

Question: The Novak Corporation issued 10-year, $4,910,000 par, 7% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 13:1, and in 2 years it will increase to 19:1. At the date of issue, the bonds were sold at 97. Bond discount is amortized on a straight-line basis. Novak's effective tax was 40%. Net income in 2017 was $8,750,000, and the company had 2,175,000 shares outstanding during the entire year.

(a) Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. $2.55.)

Basic earnings per share $

Diluted earnings per share $

Reference no: EM131770452

Questions Cloud

Residents of a dormitory are separated into two groups : Suppose 500 residents of a dormitory are separated into two groups. The first group is asked the following questions in this order:

Discuss what is a health managers responsibility : an acute care hospital in the equation will have assets what are the example of assets they have on the books

Microeconomic market structures : What are the 4 basic microeconomic market structures. Also what is the difference between them?

What might be unintended consequences and perceived benefits : What might be the unintended consequences and perceived benefits of the resolution proposed by the Christian worldview?

Compute both basic and diluted earnings per share : The Novak Corporation issued 10-year, $4,910,000 par, 7% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000.

Discuss and compute the margin of safety in dollars : break-even sales are $6,632,000. Compute the margin of safety in dollars. Compute the margin of safety ratio

What is a monopoly and a monopsony : What is a monopoly and a monopsony. Why do those concerned with consumer and labor regulations pay attention to them?

What is the role of prices in a market economy : What is the role of prices in a market economy. what is the main shortcoming of a centrally planned economy?

Compute the company sales volume in pounds : Newham Textiles manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for £7.50 each, and the variable expense.

User Account

All Pages