Compute diluted earnings per share

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Reference no: EM131220454

In 2013, Chirac Enterprises issued, at par, 75 $1,080, 8% bonds, each convertible into 130 shares of common stock. Chirac had revenues of $17,700 and expenses other than interest and taxes of $8,980 for 2014. (Assume that the tax rate is 40%.) Throughout 2014, 3,390 shares of common stock were outstanding; none of the bonds was converted or redeemed. (a) Compute diluted earnings per share for 2014. (b) Assume the same facts as those assumed for part (a), except that the 75 bonds were issued on September 1, 2014 (rather than in 2013), and none have been converted or redeemed. (c) Assume the same facts as assumed for part (a), except that 25 of the 75 bonds were actually converted on July 1, 2014.

Reference no: EM131220454

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