Reference no: EM133454185
Case Study: At the beginning of 2025, Windsor Industries had 22,000 shares of common stock issued and outstanding and 500 of $1,000, 6% bonds (issued at par), each convertible into 10 shares of common stock. During 2025, Windsor had revenues of $143,000 and expenses other than interest and taxes of $102,000. Assume that the tax rate is 20%. None of the bonds was converted or redeemed.
Questions:
(a) Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $
(b) Assume the same facts as those assumed for part (a), except that the 500 bonds were issued on September 1, 2025 (rather than in a prior year), and none have been converted or redeemed. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $
(c) Assume the same facts as assumed for part (a), except that 100 of the 500 bonds were actually converted on July 1, 2025. Compute diluted earnings per share for 2025