Compute the 2013 diluted earnings per share

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Convertible Securities and Earnings per Share

Francis Company has 20,000 shares of common stock outstanding during all of 2013. It also has two convertible securities outstanding at the end of 2013. These are:

Convertible preferred stock: 2,000 shares of 9.5%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared. To date, no preferred stock has been converted.
Convertible bonds: Bonds with a face value of $200,000 and an interest rate of 5.7% were issued at par in 2012. Each $1,000 bond is convertible into 22 shares of common stock. To date, no bonds have been converted.
Francis earned net income of $61,500 during 2013. Its income tax rate is 30%.

Required:

(a) Compute the 2013 diluted earnings per share. Round your answer to the nearest cent.

Reference no: EM131790592

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