Solution-Compute the basic and diluted eps for the company

Compute the basic and diluted eps for the company

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Reference no: EM13940943

Diluted Earnings per Share-Convertible Bonds

Delgado Manufacturing Company reports long-term liabilities and stockholders' equity balances at December 31, 2008, as follows:

Convertible 5% bonds (par)	$ 800,000
Common stock, $25 par, 100,000 shares issued and outstanding	2,500,000

Additional information is determined as follows:

Conversion term of bonds-50 shares for each $1,000 bond
Income before extraordinary items-2008	$ 199,800
Extraordinary gain (net of tax)	43,520
Net income-2008	$ 243,320

Compute the basic and diluted EPS for the company for 2008, assuming that the income tax rate is 30%. No changes occurred in the debt and equity balances during 2008.

Reference no: EM13940943

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Compute the basic and diluted eps for the company

Reference no: EM13940943

Reference no: EM13940943

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